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Colin Barker & Kara Weber

From Gdansk to Military Repression

II. ‘Accumulate! Accumulate!’ –
Polish state capitalism in crisis

9. The goals of production

Explaining the Crisis

Before we look at what happened in the 1970s, a general question needs to be answered. Why does this persistent tendency to crisis appear in the so-called ‘planned’ economies? The problem is well known:

The economy goes through periods when everything is all right, plans are well balanced and can be easily over-fulfilled, no shortages in the material supplies occur, etc. These are the periods when the ratio of actual output ... to the capacity level ... is increasing. Then, for some reason, the economy begins to dis-coordinate. Plans cannot be fulfilled or even be well balanced, scarcities and bottlenecks begin to grow, and the ratio of actual to capacity output begins to decline. That this has actually been happening is not difficult to prove; the question is, why has it been happening ... We have to find out why planners persistently repeat their errors by tending to overstrain the economy. [25]

The problem of ‘overstrain’ is more precisely defined by Professor Nuti, who refers to the tendency to ‘excessive accumulation’ in these countries, though without adequately explaining its causes. [26] The tendency to ‘over-accumulation’ lies behind all the various Phenomena of the crisis.

But why? Why don’t those who direct these economies behave differently? Why, when the results of their activity are increasingly well-known [27], don’t they stop this seemingly ‘irrational’ behaviour, by cutting down their plan-targets and pursuing a lower rate of accumulation? Why don’t they place more stress on producing means of consumption? Why not pursue what many economists nave recommended, ‘an equilibrium growth path’?

The answer is important for it has major political implications for those who want to change the system.

One answer which many Polish workers would give is: ‘incompetence’. A more sophisticated version of this argument points out that those who steer the Polish economy are not those with the most talent, but those who have learned how to crawl and be obedient to the party ‘tops’ and who want to get to be party and state bosses themselves. There is of course some truth in this. (The same thing is also true, for that matter, in the West, as many studies have shown – society’s ‘pool of talent’ is not properly used, for class-barriers stop working-class people getting into decision-making, etc. And among those who ‘succeed’, a brown tongue is a distinct asset.) But this does not explain why the ‘party tops’ should place such a stress on accumulation at the expense of popular consumption. Why, if they are to get ahead, must planners treat this goal as sacrosanct?

As Kuron and Modzelewski rightly insisted, the key problem in the economy is not a ‘technical’ one. The issue is not – as some economists suggest – that the methods of plan-implementation, the system of planners’ directives, the measures used to assess performance, etc. are at fault (though they are). Nor, simply, is lack of democracy in the planning system the problem (though it is obviously connected). What is crucial is the overall purpose embodied in the planning process and its mechanisms:

In fact, what we have here is not a contradiction between the objectives of the plan and the anti-stimuli resulting from faulty directives, but a contradiction between the class goal of the bureaucracy (production for production) and the interests of the basic groups who achieve the production (maximum consumption). In other words, it is a contradiction between the class goal of production and consumption, and it results from existing conditions, not from mismanagement. [28]

In other words, it is not simply that ‘planning’ is all right in principle but is ‘distorted’ by the bureaucracy. The problem is not just the form of the plan, but its content, what Kuron and Modzelewski correctly term its ‘class goal’. The heart of the problem is the tendency to over-investment, the goal imposed on Polish society by the class which rules Poland. The continual imposition and re-imposition of that goal onto production requires the maintenance of state controls over the workers, and requires the permanent subordination of the population’s consumption to the pursuit of accumulation.

In such a system, consumption is organised on the same basis as in all class societies. It is not the goal, but merely a cost of production, and a cost that needs to be kept to the minimum possible in order that accumulation, production for the sake of production, may proceed. Party planners treat ‘personal consumption as a cost of growth rather than the ultimate goal of growth ... the record indicates that the Polish planners – except when under unusual pressure from the population – repeatedly go on pushing the rate of growth, structurally biased towards the producers’ goods sector, until they reach the technico-organisational ceiling of absorptive capacity and the plan actually collapses.’ [29]

Most Polish workers recognise that the interests of Poland’s rulers are not the same as their own. But what, then, are the rulers’ ‘interests’? Several answers are often given by Polish critics of the system. The first is that the rulers want to keep themselves in power. And no doubt they do: they organise political life in such a way that it is extraordinarily difficult for the people to challenge them. They hate the very idea of democracy. But this does not explain their behaviour. If they wanted to be more secure in power, they would lower the rate of accumulation, satisfy people’s wants more, and thus be more popular. There would be less resentment of their power if they at least delivered the goods.

A second popular answer is that the rulers are out to feather their own nests, to live well at the expense of the people. (In essence, this was Trotsky’s explanation of the bureaucracy’s interests in Russia in the 1930s.) But it explains nothing. [30] Certainly the party and state bureaucrats live much better than the great mass of the Polish workers and farmers. But that does not explain why they place such an emphasis on steel mills, power stations, machine tools, military goods, shipyards and the like. Why don’t they devote the economy to producing luxury goods for themselves: to mink fur farms, champagne, brothel fittings, soft beds and the rest? The luxury consumption of the bosses does not define the class goal of production, any more than the consumption of the masses does.

Another answer which Poles often give to the question about the rulers’ interests is that Poland’s real rulers live, not in Warsaw, but in Moscow. It is the interests of Russia’s bosses that determine the life of the Polish people. Let us grant the partial truth of this observation, and its political significance. Nationalism, without question, is an extremely powerful motive among the people of Poland, in every class. And there are strong historical reasons for this. For centuries, the Poles lived in a country divided between three great emperors: the Prussian (later German), the Russian and the Austro-Hungarian. For a brief period, between the wars, Poland was an independent state, which (as Polish nationalism often plays down or ‘forgets’) suffered a military coup under Pilsudski and was organised for most of this period as a highly oligarchic dictatorship. In 1939, Hitler and Stalin partitioned Poland between them. Millions died in the struggle to free Poland from Nazi rule. After the war any hopes of Polish independence were snuffed out as Poland was incorporated into the ‘Russian bloc’. Socialists have to be very clear in their attitude: we have to support the rights of the Poles to national independence, as Marx and Lenin both argued strongly. Socialism is internationalist, certainly; but the only condition for a genuine internationalism is that it be based on free agreement among peoples, not on imposition by a great power on a weaker and oppressed nation.

However, to attribute the problem of Poland to the problem of Moscow will not, by itself, do. For two reasons. First, the ruling class in Poland is Polish. (The December 1981 military coup may have helped dispel illusions about this among Polish workers.) Second, even if it were true – which it isn’t – that Poland is nothing but a province of Russia, we should still be left with the problem of explaining why the system operates as it does. After all, the same fundamental drives are found in Russian production, and in all the other East European economies; all experience the same symptoms of exploitation and crisis.

So, the question becomes – on a slightly larger canvas – how are these ‘communist’ societies organised, and why do they all have this same tendency to social and economic crisis?

And in order to answer this, we have to make a leap beyond the conceptual limits of nationalism. We have to recognise that what happens in any modern country is not simply a function of the social relations within that country taken in isolation, but also of the whole world system of which that country is a part. That means that there is a sense in which, when we talk about something like ‘Polish society’ or ‘the Polish economy’, we are talking nonsense. The geographical boundaries of Poland are not the limits of ‘society’ or ‘the economy’. This is perhaps obvious to any Pole facing East, but less obvious when he or she looks West.

Yet we can only understand the phenomena of crisis, the systematic exploitation of the workers and peasants, and the tendency to ‘excessive accumulation’ when we grasp that what happens is Poland is a function of Poland’s place in the whole world economy.

It has been one of civilisation’s achievements over the last few centuries to join together the various discrete societies across the globe into one world society. Today there is no part of the world that is not affected by what happens elsewhere. We live in a single-world society, of which the different nations, states, corporations, classes and the like are ‘parts’. ‘Society’ and ‘economy’ cannot be properly understood as nationally bounded units.

Of course, this one, universal world economy and society in which we live is riven with internal conflicts and contradictions, is characterised by division and disunity, by the rivalry of states and capitals, by domination of the strong over the weak, and by competition in the military, economic and political spheres between contesting imperialisms; but this fact does not make this any less a single system of social interaction and production. Rather, these phenomena define the kind of social relations that characterise the world system. They shape the forces operating within every one of the various ‘national parts’, both the advanced and the backward, the dominant and the subordinate.

Only in this context can we explain why there is such an excessive rate of accumulation within the Polish economy. The cause of this is the pattern of relationships between the Polish state and the rest of the world. Poland, for example, has the eighth largest military budget in the world. Why? Not simply to contain its domestic population, but also because it is the second industrial power within the ‘Warsaw Pact.’ And the Pact, as a whole, imposes an immense burden on the peoples of Eastern Europe, taking their sons off into the armed services, sucking taxes out of them, demanding that a high proportion of their productive effort be devoted to the manufacture and maintenance of modern weapons systems. Again, why? Not simply to control the people of Eastern Europe, but also because of the Warsaw Pact’s relations with the rest of the world. And what characterises that relationship – above all the relationship with the Nato powers – is a permanent condition of escalating competition in the economic and the military spheres. On the other side, the peoples of ‘western democracy’ have to suffer similar military burdens, in order that ‘their’ states may also compete. The Cold War defines the situation in Poland in crucial respects, as it defines a central aspect of the world system since the war.

The key aim of Poland’s rulers is the same aim that all the ‘communist’ rulers share. Stalin formulated it in stark terms in the very period when he was forcing an excessive rate of accumulation on the Russian people and robbing the peasantry of their land in the ‘collectivisation of agriculture’. The aim was to ‘catch up and overtake’ the West. In imposing that aim onto Russian production, Stalin imposed the same logic onto Russian society that Marx identified as the mainspring of capitalism: accumulation for the sake of accumulation, production for the sake of production. The same aim is the ‘class goal’ of Poland’s rulers today.

All the ‘communist’ regimes began as relatively backward countries, faced as long as the world capitalist system survived with a choice: either to submit to the terms of the stronger capitalist powers, or to develop in competition with them. This choice is not one that was limited only to regimes calling themselves ‘communist’. The same dilemma faced Japan in the mid-19th century, and there a revolution in favour of rapid industrialisation was carried out, not by any ‘communist’ regime, but by ‘feudal’ samurai, a military regime that developed a mostly nationalised industry by squeezing the peasants and the workers much as Bierut, Gomulka and Gierek were to do in Poland. The former samurai also achieved astonishing economic growth rates, rivalling in the 1930s those of Stalin’s Russia.

Some writers, both in Eastern Europe and in the West, have treated the system in Eastern Europe as a ‘second world’ diverging from capitalism. They have invented various terms to try to describe it: ‘statism’, ‘bureaucratic collectivism’, ‘state collectivism’, ‘actually existing socialism’ and the like. All, however, have failed to explain the Eastern European path of development, denying that its relationships with the rest of world capitalism – those aspects which precisely make Poland etc. part of a ‘single world’ – shape its internal workings. [31] Yet nothing except the pressure to develop competitively can explain what we find.

If the military drain on Poland and similar countries is, proportionately, greater than in the Nato countries, the reason is above all the more backward character of the Warsaw Pact economies, which must try to match tank for tank and missile for missile with their richer military competitors. If the planners demand a higher rate of accumulation in the East than obtains in the West, and a still stricter consumption regime, the same applies: competition – the effort to ‘catch up and overtake’ – demands it. Thus it is external relations which set the parameters of the accumulation rate – and hence of the crisis tendency – within the economies of Comecon.

It is sometimes imagined that there is some incompatibility between ‘planning’ and competition in these countries. This is to misunderstand the real character and purpose of ‘planning’. Just as large Western capitalist corporations and nation-states have increasingly turned towards ‘planning’ in the postwar world, in response to sharpening competitive pressures, the same is fundamentally true within Poland. The activities of the ‘planners’ are not an alternative to competition: they are shaped by it, and directed towards it. Planning is undertaken in order to compete.

Those who ‘plan’, who exploit the workers of Polish industry and of the countryside and who accumulate and re-invest the surpluses sucked out of their labour, play the same objective function within Poland as those who head the capitalist corporations of the West. The main difference is that in the West there is – because of the ‘private’ character of much productive property – a greater division of labour and function among the ruling class: the state in the West controls domestic repression and exploitation more autonomously from those who direct the industrial accumulation and exploitation process. But that is the main difference, and a difference moreover which is tending to reduce over time, as western nation-states also become increasingly embroiled in direct economic management, in direct state ownership of productive industry, etc.

Two general theoretical implications should be quickly noted. The first is that we can not understand the modern state – as much of Marxist theory tends to attempt – simply as a mechanism of ‘internal’ control, when it is also simultaneously a mechanism of ‘external’ competition. Janus-like, the state faces inwards at exploited society and outwards at other states and capitals. It is this dual role of the state, much under-emphasised in most theorising about the state, which precisely makes it suited in the modern period to play the part of ‘capital personified’. [32]

The second implication is that the Marxist notion of ‘class’, and especially of the ‘capitalist class’, needs to be rescued from an ever more inappropriate restriction, according to which what matters is the ‘private pocket-book’ interest of the capitalist. Legal private property is not the core of Marx’s understanding of capitalism; if anything, for Marx, it was not so much that people own capital as that, in order to retain their power, capitalists must continue to act as capital personified. Capital, Marx insisted, is not a ‘thing’ (which can be ‘owned’) but is a ‘social production relation’, which constrains those it possesses into permanent accumulation drives. Those who do not understand this can no more grasp the functioning of nationalised industries in Britain, or of ‘salaried management’ in large corporations, than they can the workings of East European economies. ‘Personal’ interests are secondary matters in capitalism’s workings.

We can thus answer our question. The reason why the Polish and similar ‘planners’ act ‘irrationally’ is that world competition forces Poland’s rulers to act in this way. They aim at the highest possible rate of growth, at the highest achievable level of accumulation, in pursuit of their class goal: production for the sake of accumulation. Production for the sake of consumption – the interest of the working class – threatens the Polish rulers’ class existence. For them, truly, consumption is a cost of production, never its purpose. The same relations, the same drives, that force those who head the capitalist concerns of the West to the over-production of capital also motivate them; the same factors push them to steer their economies into crisis.

In a competitive world, every unit – if it is to ‘survive’ – must follow the same general rules. The ‘game’ is called capitalist production. It is anarchic in character, its path of progress is ridden with crisis. So why not just opt out? Why not, instead, develop a national economy in Poland – or elsewhere – based on the goal of consumption? Because the ‘game’ is played across a competitive world, in which those who try to play by different rules lose out to those who pursue the accumulation of capital. Those who win get strong and dominate the weak. Thus every national ‘system’ is compelled to struggle for its ‘survival’ – and, for the survival of its competing bloc.

Theoretically and practically, it is possible to develop an economy based on different principles, moving on ‘an equilibrium growth path’, geared to production for the sake of consumption (i.e. for human need), developing without ‘excessive accumulation’. But only on two conditions. The first is that the majority class in society, the working class, actually rules over production, politics, etc. – and that requires that the power of the existing ruling class, together with all the institutions of its rule, be destroyed. The second is that, in place of the competition of capitals (private, corporate, state, it makes no difference), those who produce develop a world economy based on mutual cooperation. The two conditions are otherwise known as international socialism.

Expanding the crisis: the 1970s

The new regime under Gierek decided to attempt to break out of the vicious cycle of growing stagnation and backwardness, and to get away from the social conflict engendered by Gomulka’s regime, by turning towards the West.

The long-term effect of this policy was the reverse of that intended: instead of overcoming the crisis, it became amplified. All the forces and symptoms of crisis noted above were, within a few years, to return to Poland, in a greatly magnified form.

One commentator described the new policy as follows:

Industry would have to be modernised. Technology would have to be encouraged to play a more active part in economic growth. The means of achieving this would be to develop links with what must have been perceived as the powerhouse of technological progress – modern capitalism. Since hard currency was not available to pay for the import of modern machinery, equipment loans would have to be obtained or other arrangements, such as buy-back agreements, made. The economy would therefore become more open in terms of international relationships. While the first few years of this policy would be years of debt accumulation, it was hoped that later the newly modernised Polish industry would be able to compete successfully with capitalist firms for markets in the West. Presumably it was hoped that the Polish economy would continue to expand its international links in the future. [33]

If economic growth was the general intention, then the Polish bureaucrats were partially successful. The growth rate doubled. By 1973, Poland was said to have the third fastest growth rate in the world [34] The ‘opening to the West’ seemed to be pulling the Polish economy up from its downward growth path. By comparison, Russia, which only marginally modified its ‘autarchic’ development path, continued to experience declining growth rates. But the growth rate was not what was ‘planned’: Polish national income grew one and a half times faster than the plan had allowed for in the first half decade, with wages rising faster than planned and investment running at double the plan-rate. [35] In the pursuit of ‘economic reform’, investment decisions were partly decentralised, into the hands of ‘giant economic enterprises’ (WOGs), who borrowed and invested at phenomenal rates. The bureaucracy went on a prolonged growth spree, for which the whole society had to pay dearly within a few years.

According to the official figures, money wages rose by 56% from 1971 to 1975, and real wages by 40%. As before, the official figures overstate the rise. [36] Nonetheless, living standards did rise, and much more rapidly than they had in the 1960s. Official figures for meat consumption suggest that the average Pole ate 56 kg of meat in 1971 and 70 kg in 1975. [37] On the other hand, in relative terms the housing situation became even worse than it had been: new housing construction’s share of total national investment fell from around 20% in the early 1960s to 16% in 1970 and only 13% in 1975. [38]

Already, in the ‘boom’ period, the tendency to inflation was becoming more pronounced. Between 1966 and 1970, the official price level rose by 4½%, but from 1971 to 1975 it rose by 13%. The gap between official and ‘free market’ prices widened sharply: in the 1960s the two sectors had moved more or less in step, but while state prices in the first half of the 1970s rose 3.5% free market prices rose by almost 37%. [39] The Polish workers and peasants experienced growing shortages, and a growing need to queue for necessities. Workers’ and peasants’ incomes rose faster than the supply of goods to meet their needs, and as a result the ‘monetary balances’ in their hands grew much faster than their earnings. A situation of ‘excess demand’ was thus generated.

Another source of inflation was the new giant firms into which industry was reorganised in the early 1970s. These giant firms were required to sell existing goods at controlled prices, but could set their own prices on new products. ‘Production in Poland was in the hands of monopoly producers, who were now given full opportunity to exploit their market power. Moreover, they faced markets characterised by excess demand. Neither competitive forces nor the level of excess demand placed an effective brake on price increases. Existing goods began to disappear from the markets, to reappear thinly disguised as new products by minor changes in design specification or packaging. These factors played an important part in the emergence of more open inflationary pressures from 1973 onwards.’ [40]

The burdens of the peasantry were also lightened somewhat. The compulsory delivery system was abolished in 1973, and peasants were admitted to the national health service. Peasant incomes rose. So did agricultural output – though the rise was short-lived. [41]

But, if consumption levels rose, the previous priorities of the system were maintained and indeed reinforced. If the official statisticians claimed a seven per cent rise in annual consumption, they recorded a growth in accumulation of 20% a year. The share of accumulation in the national income rose to an incredible 35.6% in 1975; this was the highest ratio of investment of national income in the whole of Eastern Europe. [42] The investment drive reached extraordinary proportions. In the 1960s, Poland spent an average $100m a year on imports of Western machinery. By 1972, seven times that amount was being spent, and by 1974 19 times. [43] Looking back from the vantage point of 1980, Nuti commented:

The prime cause of the Polish crisis seems to be the overambitious and unchecked policies of accumulation followed under Gomulka and accelerated by Gierek especially in his first five years, which brought up the share of accumulation in the national income distributed from 25.4% in 1969 to the record levels of 35.6% in 1974 and 35.2% in 1975. [44]

The features that Kuron and Modzelewski had noted in the 1960s were exaggerated still more:

If we compare the decades 1961–70 and 1971–80 we find that the share of investment devoted to agriculture fell from 16.5 to 15.7 per cent; investment in social consumption (hospitals, schools, etc.) fell from 28.3 to 23 per cent; while the share of industrial investment rose from 37.8 to 41 per cent. [45]

The full effects of this neglect of consumption for accumulation were appalling. The health service was starved of funds. In 1981, Polish hospitals found themselves lacking supplies even of bandages and plaster of paris. Industry too was developed with little care for the environmental effects: the Katowice industrial region, where the fastest development occurred, is now the worst area of the country in terms of diseases of the circulation, cancers and respiratory diseases. It pours filth into the atmosphere at an incredible rate. Downwind from Katowice is the ancient city of Krakow, where acid rain falls at nine times the official acceptable national limit. [46] The women of the Lodz textile industry have the highest still-birth rate in Europe. [47]

In the heady rush for smart new foreign technology, investment in the modernisation of existing plant and equipment was neglected, taking up only 20–25 per cent of investment funds (compared with 60–70% in East Germany and Czechoslovakia). [48] This imbalance in investment was further exaggerated by vast regional disparities: 16% of the total investment outlay was poured into just one area, Gierek’s party stronghold of Katowice, producing excessive strains in transport investment. [49]

Nor did the ‘boom’ lead to improvements in quality commensurate with the growth in national income. The heads of enterprises faced a domestic market where demand was rising fast, and where there were no effective mechanisms to enforce improved quality. While the theory was that enlarged exports of manufactured goods, especially machinery, to the West would help to pay off the mounting debts, in practice this did not happen: machinery’s share of total exports remained at the low level of 13% in 1975. [50] In practice, Polish industry could not produce at sufficiently high quality to compete in Western markets. Indeed, the level of industrial rejects rose. [51] Some of the reported growth in output was dubious, due to price manipulation by the giant enterprises. And a growing proportion was of poor quality, destined to lie unwanted in warehouses. A Silesian worker told Polityka that much of the coal output was ‘fiction’; in one mine, the director ordered the construction of a machine to mix stones in with the coal – ‘it was tonnage which was dug, not coal’. [52] Towards the end of the boom, stocks were growing faster than sales. [53]

As a result of the failure to export more machinery, Poland instead had to rely increasingly on exporting raw materials and semi-finished goods, which (a) were needed in Poland itself, (b) were less profitable as exports and (c) worsened the shortages and the inflation tendency within Poland itself. [54]

On the other hand, there were distinct benefits from some of the Western imports. The long Polish investment cycle could, in some important cases, be drastically shortened: for example, ‘Two American-produced refrigerated warehouses were built in Lublin and Lagisza within a twelve-month period, while previous Polish projects of this sort had taken between twenty-four and thirty-two months to complete.’ [55]

The pattern of Polish trade altered sharply. The share of the developed Western capitalist countries in Polish foreign trade turnover rose from 27% in 1970 to over 40% in 1975. But there was a major imbalance in this growth: exports to the West rose 2½ times between 1971 and 1975, but imports rose nearly 4½ times. [56] Export to the West rose, as a share of total exports, from 28% to 31%, but Western imports grew from 25% to 50%. [57] Poland’s trade with the capitalist West thus developed a massive imbalance.

Thus, the unusual combination – for an East European economy – of simultaneously rising consumption and rising accumulation was due to Poland ‘living beyond its means’. What Polish statisticians call ‘national income distributed’ grew faster than ‘national income produced’. [58] The gap was provided by Western credits. Polish debts to Western banks and governments piled up inexorably. In the period of ‘autarchic’ development in the 1960s, Poland’s cumulative debt to the West amounted to $303 million; by 1976, at the end of the ‘boom’, it was $11,200 million. [59] And the trade deficit with the West had worsened enormously.

The opening of the Polish economy to the West was, of course, not simply the result of Gierek’s search for a way out of domestic crisis. Western capital was looking East for investment opportunities in an increasingly crisis-ridden world economy. Investment in the ‘communist’ bloc appeared quite attractive to western multinationals:

... from the point of view of the international investor, there is much to be said for involvement in communist countries, where costs and particularly wages are relatively lower than in the west, industrial relations are strictly controlled from the centre, independent workers’ organisations and strikes are for the most part illegal, and the embarrassment of the political elite concerning its dependence on expatriate capital leads to the suppression of information that has proved harmful to the image of corporate capital elsewhere. [60]

Nor was Poland alone in looking to the West for imported machinery and technology. The whole Comecon debt to the West grew rapidly in the 1970s, from $13 billion in 1974 to $55 billion in 1978. 60% of this debt was held by western banks, which had plenty of money ready for lending thanks to the depressed levels of investment in the West and the floods of petrodollars they were recycling. Indeed according to the Wall Street Journal:

Foreign bankers are as happy to lend to the communist government as to a family business. Happier. They’ve found in governments like Poland – and many others, incidentally – borrowers who will pay at rates Western industrial powers would scorn. And some bankers boast privately that even if they were forced to write off their Polish loans now they might show a profit on their loans to the nation over the past decade, so lucrative have been these deals. [61]

Another Western authority has commented recently:

The west itself was not merely a passive observer, but actively encouraged Poland to take its credits and plant and equipment exports. The major commercial banks took the initiative with Poland, while, among governments, the French pursued an especially aggressive export-credit policy. The financing urged upon Poland did not facilitate adjustment to foreign-sector problems but rather generated them; the machinery exports it sold created employment in the west, but much now sits at least partly unemployed in Poland. [62]


25. Oldrich Kyn, Wolfram Schrettl and Jiri Slama, Growth Cycles in Centrally Planned Economies: an empirical test, in Kyn and Schrettl, eds., On the Stability of Contemporary Economic Systems, Gottingen 1979, p. 120.

26. Op. cit.

27. The phenomena of the crisis cycle were clearly noted by East European economists by the mid-1960s at the latest. See for instance the bibliography to Kyn et al., op. cit., p. 131.

28. Kuron and Modzelewski, op. cit., p. 34.

29. Janusz G. Zielinski, Economic Reforms in Polish Industry, London 1973, cited in Bogdan Mieczkowicz, The relationship between changes in consumption and politics in Poland, Soviet Studies XXX, 2, April 1978, p. 267.

30. The theorists of the Fourth International appear to inhabit a dream-world. Not only do they leave the dynamic of these economies unexplained, they seem not even to notice that they have dynamics. Mandel, for example, felt able to refer, in italics, to ‘the stable markets that are assured by the planning in the workers’ states’ – despite the fact that his own article provided contrary data and that he was writing at a time when they had never been so unstable (The impact of the world capitalist recession on Eastern Europe, Intercontinental Press, 14 July 1980). Peter Green, who does describe the reality of Poland very well, gets round the problem of explanation by vagueness and imprecision: ‘In an economy whose basic regulative principle involves political bargaining over every aspect of productive activity, the exclusion of the direct producers from the political process is a formula for economic stagnation and waste.’ (op. cit., p. 106).

31. Rudolf Bahro, at times, comes close to grasping the point, though he never integrates his real insights into his theory. For example, ‘The measure of accumulation needed for socialism is not determined within the system itself, but rather in so-called competition with capitalism’. The Alternative in Eastern Europe, London 1978, p. 134. For a general critique of these theories, see Peter Binns and Mike Haynes, International Socialism, winter 1980; Colin Barker, Theories of Russia, mimeo 1981.

32. Cf. Colin Barker, A note on the theory of capitalist states, Capital and Class 4, spring 1978. The importance of the external relationships of states is also explored well in Theda Skocpol, States and Social Revolutions, Cambridge 1978.

33. Blazyca, op. cit., p. 103.

34. Neal Ascherson, The Polish August, Harmondsworth 1981, p. 107.

35. Harman, IS 94; Nuti, 1980.

36. Green, op. cit., p. 80; Shapiro, op. cit., p. 458; Harman IS 94, p. 26.

37. P.G. Hare and P.T. Wanless, Polish and Hungarian Economic Reforms – A Comparison, Soviet Studies XXXIII, 4, October 1981, p. 492. (The authors note that in Britain, over the same period, meat consumption fell from 50.4 to 46.2 kg per head, as prices rose sharply.)

38. Stanislaw Gomulka, Poland’s Economic Situation in the Second Half of the 1970s, Osteuropa Wirtschaft 24, 1, 1979, p. 16. In the West, the share of housing construction in total investment is typically around 20–30%. In Poland, the number of households exceeds the number of dwellings by some 1.4 million, in a population of 35 millions. The average size of dwellings is ‘among the lowest in Europe’. Writing in 1979, Gomulka thought no real improvement in Polish housing likely till the late 1980s – a projection that now seems over-optimistic.

39. Computed from Hare and Wanless, op. cit., p. 493.

40. Hare and Wanless, op. cit., p. 502; also Mieczkowicz.

41. Harman, IS 94, p. 27; Nuti, 1981, Table 1, p. 106.

42. P.T. Wanless, Economic Reforms in Poland 1973–79, Soviet Studies XXXII, 1, January 1980, p. 39. Blazyca (op. cit., p. 105) provides the following table for the annual growth rate of investment:








Whole economy




























43. Ascherson. op. cit., p. 109.

44. Nuti, 1980, p. 23.

45. Nuti. 1981, p. 119. See above for the fall in housing’s share of investment. See also L. Frances Millard, The Health of the Polish Health Service, and KOR, The state of the hospital system, Critique 15, 1981.

46. Lloyd Timberlake, Poland – the most polluted country in the world?, New Scientist, 22 October 1981.

47. KOR, Biuletyn Informacyjny, nr 4/38, year 5, June 1980.

48. Nuti, 1981, p. 119. According to Zauberman (Problems of Communism, Mar.–Apr. 1978, p. 65) by 1976 no less than half of Poland’s industrial capacities represented equipment installed during the single quinquennium 1971–75.

49. Nuti, 1981, p. 119.

50. Green, op. cit., p. 92.

51. Ibid., table 9, p. 92.

52. Polityka (Warsaw), nr. 51, 27 December 1980.

53. Blazyca, op. cit., p. 106:

Annual Average Rates of Growth (%)






Global sales





Stocks of finished goods





54. Gomulka, op. cit., p. 18.

55. Green, op. cit., p. 18.

56. Computed from Nuti, 1981, table 2, p. 108.

57. Wanless, op. cit., p. 40. Green, op. cit., pp. 80–81 gives slightly different figures, though the trend is the same.

58. Blazyca, op. cit., p. 105:

Annual growth rates of national income (%)






















59. Nuti, 1981, pp. 107, 108.

60. Shapiro, op. cit., p. 484. For an extended discussion, cf. Charles Levinson, Vodka-Cola, 1980.

61. Wall Street Journal, 7 December 1981.

62. Professor Richard Portes, cited in Euromoney, August 1981, p. 14.

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