Series: The History of Economic Thought in Transitional Countries〈 2〉 Polish Economics and the Polish Economy: A Study for the Twentieth Anniversary of Transition in

Marek Ratajczak

Abstract: The anniversary of the launch of transition in Poland is a good opportunity for sum- marizing the changes that have occurred in Polish economics and the Polish economy over the last twenty years. The author believes that certain processes cannot be un- derstood without providing a broader historical background to them. Therefore, the aim of this paper is to present what the author believes to be the most important trends in the development of the Polish economy and Polish economics not only in the postwar period, but also before World War II. Polish economics and the Polish economy have undergone transformation over two decades of transition. In this peri- od, Polish economists began to adapt their research to major trends of modern eco- nomics. A majority of them agreed to the concepts of mainstream economics. The main weakness of Polish economics continues to be the limited number of publica- tions in prestigious English-language periodicals. In effect, Polish economics contin- ues to be little known in the world. JEL classification numbers: B 24, N 14, P 30.

present author believes that certain processes I Introduction cannot be understood without providing a The year 2009 will witness the twentieth an- broader historical background to them. niversary of Poland’s transition from what Therefore, the aim of this paper is to present was previously referred to as socialism and what the author believes to be the most im- today is known as ,1） to a demo- portant trends in the development of the cratic system with a . The Polish economy and Polish economics not transition anniversary is a good opportunity only in the postwar period, but also before for summarizing the changes that have taken World War II. place in Polish economics and the Polish Interestingly, it is Poland-with its Soli- economy over the last twenty years. The darity movement, Round Table talks between

The History of Economic Thought, Vol. 51, No. 2, 2009. Ⓒ The Japanese Society for the History of Eco- nomic Thought. 2 経済学史研究 51 巻 2 号 the authorities and democratic opposition in held the first congress of lawyers and econo- 1989, and partially-free elections held in the mists in Cracow-Poland’s capital until the same year-that was at the forefront of tran- 17th century and the main city of the area sition. under Austrian rule. The year 1900 witnessed the publication of the first issue of Ekono-

II Polish Economics and the Polish mista, which continues to be a flagship Economy before World War II Polish economic journal even today. Since social and economic transformation is One of the implications of World War I a long-term process, understanding current was a radical change in the political map of phenomena without historical analysis is of- Europe. In 1918, Poland regained independ- ten impossible. In an attempt to understand ence. The legacy of the period of partitions the Polish transition, distant historical events included fundamental problems（ e.g., three that restricted the development of Poland’s different legal systems, lack of an independ- economy and Polish economics must occa- ent currency, or a uniform banking system） sionally be focused upon. In particular, it is as well as practical difficulties（ e.g., the lack worth recalling that at the end of the eigh- of a direct rail link between Warsaw, Po- teenth century, as a result of numerous parti- land’s capital, and Poznan´ , the main city of tions, Poland ceased to exist as an independ- the Great Duchy of Poznan´ , which encom- ent and integrated political, economic, and passed the territory of Prussian Poland）. A social state. In the nineteenth century-a cru- rather serious threat to the re-emerging state cial period for the development of econom- came from the fact that its borders were nei- ics as a science and the market economy in ther clearly established nor accepted by Europe-owing to Poland’s loss of sover- neighboring countries. Of particular danger eignty and division among Austria, Prussia, were the Russian revolution and the resultant and , the Polish society did not partici- Polish-Soviet war. Another serious problem pate as an independent body in political and was the economic consequences of World economic life in Poland. In addition, Austria, War I. Prussia, and Russia treated Poland’s territory However, despite all the above-mentioned as a peripheral and buffer area. problems and threats as well as politically Such lack of also resulted in and economically destructive phenomena rather limited opportunities for academic ac- such as , Poland managed to tivity. University education in the Polish lan- survive the most difficult initial years of in- guage existed only in Austrian Poland（ Gu- dependence and gradually began to develop. zicki and Żurawicki 1969, 198）. Scientific A symbol of the new economic era was the societies were a substitute for Polish-lan- currency reform of 1924, which replaced the guage academic institutions; some of these Polish mark with the zloty that was pegged societies are surviving to this day. In 1887, to gold. In 1929, Poznan´ hosted the General despite difficult conditions caused by the National Exhibition that presented the eco- lack of political , representa- nomic achievements of the first decade of tives of all three parts of partitioned Poland independent Poland. Ratajczak: Polish Economics and the Polish Economy 3

The had a significant Austrian school traditions（ Spychalski 1999, impact on the Polish economy. It is an estab- 305）.3） A follower of the Cracow school was lished fact that Poland’s economic crisis be- Edward Taylor （1884-1965）, who moved gan to subside only in 1935; it was a time from Cracow to Poznan´ and who personifies when the country, faced with an increasing the Poznan´ school of economics. Another threat from Germany and the , economist connected to Cracow was Oskar launched its industrialization and economic Lange（ 1904-1965）, who was known for his modernization programs. The outbreak of famous dispute with Ludwig von Mises over World War II on September 1, 1939 marked the rationality of an economy based on the the end of what is now referred to as the Sec- concept of central planning. From Warsaw it ond Republic （the First Republic was the is important to mention Aleksy Wakar pre-partition “Noble Republic”）. （1898-1966）, Jan Drewnowski（ 1908-2000） The two decades of the interwar period and Edward Lipin´ ski （1888-1986） （No- witnessed the development of economic wicki 1991）. Another economist connected studies in Poland’s main academic centers, to Warsaw was Michał Kalecki （1899- particularly Warsaw, Cracow, and Poznan´ , as 1970）, the best-known Polish economist in well as Lvov and Vilnius, which belonged to the world associated above all with Keyne- Poland in the interwar period. These five cit- sianism.4） After World War II, all these econ- ies had state universities, the oldest of which omists worked in a country whose official was Cracow’s Jagiellonian University estab- name was the People’s Republic of Poland. lished in 1364 and the newest was Poznan´

University founded in 1919. In addition to III The Polish Economy and ’ the five universities, there were also higher Economics in the People s schools of commerce, which initially pos- Republic of Poland sessed no academic rights.2） One of the consequences of World War II In the interwar period, the research areas was a political, economic, and military reor- of Polish economists reflected the main ganization of Europe. Poland, together with trends in world economics, and were related such countries as , Czechoslovakia, to the development of the neoclassical- , , and the German Demo- Austrian-and mathematical schools of cratic Republic（ created in the Soviet occu- thought. In this period, the research of Polish pation zone）, became part of the area of So- economists was also influenced by histori- viet influence. The so-called Yalta order, cism or Marxism. However, in general, apart confirmed at the Potsdam Conference, led to from a few scholars, the achievements of that a division of Europe into Western and East- generation of Polish economists could hardly ern parts that would last over forty years（ ir- be described as original. However, there respective of the actual geographical location were certain notable exceptions, including of a given country）. Initially, immediately Adam Krzyżanowski （1873-1963）, who after the war, it was falsely believed that So- was considered to be the main representative viet leaders would settle for a guarantee of of the liberal “Cracow school,” influenced by friendly neutrality on the part of the above- 4 経済学史研究 51 巻 2 号 mentioned countries, including Poland, rather of Warsaw’s prewar population. Accounting than impose on them a political and econom- for approximately 10%（ 3.5 million） of Po- ic system based on the Soviet model.5） In the land’s total population, Jews constituted the discussion on the transformation that oc- country’s second largest ethnic minority after curred in Poland after World War II, the sig- Ukrainians. nificant territorial and demographic changes War and postwar migrations considera- that occurred at the time must be taken into bly changed the ethnic structure of Poland’s consideration. Geographically, Poland’s bor- population. In prewar Poland, ethnic minori- ders were extended considerably toward the ties accounted for a third of the country’s cit- west. On the one hand, the country acquired izens; however, currently the figure is only certain territories that had belonged to the approximately 4%. Among the demographic Third Reich before World War II, and on the consequences of World War II, a dramatic other hand lost its prewar eastern provinces, reduction in Poland’s total population must which were incorporated into the Soviet Un- also be highlighted-34.9 million in 1939 ion and now constitute portions of the cur- but only 23.9 million in 1946（ 38.1 million rent , Lithuania, and . As a at the end of 2008）. result of these changes, two old Polish aca- In economic terms, the consequences of demic centers-in Vilnius and in Lvov- war damage were rather significant. Conse- ceased to exist. quently, merely 27 years after regaining in- In terms of demography, the shifting of dependence in 1918, Poland faced the need Poland’s borders resulted in further division to rebuild its economic structure almost from of areas populated largely by prewar ethnic scratch. As has been previously mentioned, minorities: Ukrainians, Belorussians, and initially it appeared that Poland would be Lithuanians. Following the decisions of the able to preserve the status of a country that Allied , Germans living in terri- was at least partially independent of the So- tories that had belonged to the Reich prior to viet Union. However, this period lasted from the war were displaced to the then occupa- July 1944-when the Red Army crossed the tion zones. On the other hand, from the areas new Polish-Soviet border on the River Bug incorporated into the Soviet Union, Poland and a new Polish government began to re- received a large influx of repatriates- construct the country’s administration-to who had lived for generations in the Eastern the year 1948. It was in these years that the borderlands but who had been forced to so-called triple-sector economic model was leave them because of the shifting of Po- being promoted in Poland. The model was land’s borders. In order to provide a complete based on the coexistence of the state sector, picture of Poland’s demographic changes, the private sector, and . Further, it tragic consequences of the Third Reich’s was decided that certain elements of central policy of mass extermination of Jews must planning must be introduced in the economy, be mentioned. Prewar Poland was home to which was manifested in the establishment the largest Jewish community in Europe. of the Central Planning Office（ CUP） head- Jews accounted for approximately one-third ed by well-known economist Czesław Bo- Ratajczak: Polish Economics and the Polish Economy 5

browski（ 1904-1996）. The CUP developed obtained practical experience of a “ and supervised the implementation of the economy,” which was introduced to world Three-Year Plan of Reconstructing the Econ- economics numerous years later by the Hun- omy（ 1947-1949）, which was the only suc- garian economist János Kornai. cessful economic plan in the history of the Stalinism in Poland was a period of in- People’s Republic of Poland. Both the con- tense industrialization that was primarily re- cept of three sectors and other projects pre- lated to the development of heavy industry pared by the CUP were developed predomi- and efforts for total of the nantly by economists who were ideologically economy. The public sector comprised state- close to the Polish Socialist Party, which owned enterprises and cooperatives. The lat- could be described today as social democrat- ter, due to organizational and administrative ic. restrictions imposed on them, were very dif- A sign of the relative freedom permitted ferent from the traditional cooperatives. in Poland in the first postwar years was the Therefore, attempts were made to use the return of surviving members of the prewar concept of movement to radical- academic community to Polish universities ly change the ownership structure of agricul- and other higher education institutions. A. ture. Cooperatives, modeled on the Soviet Krzyżanowski resumed work at Cracow’s concept of collective farms, were supposed Jagiellonian University, and E. Taylor began to eliminate the private sector that was based lecturing in Poznan´ . Those active in Warsaw on family-owned farms. The government included M. Kalecki（ who soon moved to was determined to transform Polish agricul- the UN）, E. Lipin´ ski, A. Wakar, J. ture for several reasons. One of them was the Drewnowski, and numerous others. fact that people who lived in rural areas ac- In December 1948, at a unification con- counted for 60% of the population and were gress, the Polish Socialist Party was absorbed very strongly attached to the Catholic by the Polish Workers’ Party, which was po- Church, which expressed its reserve and crit- litically and economically much more pro- icism with increasing openness toward the Soviet. The unification congress and the cre- government’s policy. ation of the Polish United Workers’ Party However, the policy of collectivization （PZPR） marked the beginning of the Stali- did not produce the desired results.6） This nization of Poland. The country became the fact had crucial implications for the entire Soviet Union’s satellite, which was expected period of a centrally- in to follow Soviet political, social, and eco- Poland because the country preserved a nomic models. On the economic front, the farming model based on private ownership. “battle for trade” of 1947, which dramatically This distinguished Poland from those coun- reduced the number of private businesses tries that maintained rather close economic operating in this sector of the economy, was and political relations with the Soviet Union. a harbinger of the new order. However, at the Permitting the existence of privately-owned same time the economy suffered a shortage farms did not imply that the authorities ac- of consumer goods. It was then that Poles cepted the free market. Rather, they imposed 6 経済学史研究 51 巻 2 号 a system of obligatory supplies of farm pro- popular publication used predominantly, al- duce on private farmers, which had to be though not exclusively, in training courses sold at low prices that were determined by on Marxism-Leninism. the state. This system was abolished only in Due to the lack of freedom for conduct- 1972. ing economic research in Poland, certain Further, the Stalinist-period policy of in- scholars engaged in the development of only tense industrialization ended in failure. The those areas of economics that appeared less Six-Year Plan（ 1949-1955）, which emanat- sensitive to ideological pressures. For exam- ed of this policy, led to permanent and in- ple, it was at that time that Oskar Lange pub- creasing disproportions in the development lished his textbook Theory of Statistics and of various industries, particularly the favored developed his interest in econometrics and production of means of production and con- cybernetics.7） Another area that appeared sumer goods. ideologically safe was the history of eco- In the field of economics, Stalinism in nomic thought, which was studied by both E. Poland was a period of evident stagnation or Lipin´ ski and E. Taylor. Certain scholars, such even regression. Only “Marxist-Leninist as E. Lipin´ ski and J. Drewnowski, translated economics” was recognized. Prewar profes- classics of economic literature that included sors were dismissed from universities by be- works by Adam Smith, David Ricardo, and ing forced to take early retirement. There- John Maynard Keynes whose books usually fore, the form of official Polish economics comprised ideologically acceptable com- was determined by economists who accepted mentary. Moreover, in the 1950s, authors Marxism in its version, imported from the also wrote books without hope of publica- Soviet Union. tion, at least until there was a transformation At the First Congress of Polish Econo- in the political situation. An example is the mists in 1950, Włodzimierz Brus （1921- doctoral dissertation of Wacław Wilczyn´ ski 2007）, a former student of M. Kalecki, deliv- （1923-2008）, one of the best-known Polish ered a program paper entitled “On the state economists today. His dissertation, entitled of economic sciences in Poland.” Signed by Basic Directions in Contemporary Competi- the young man（ 29） but believed to have tion Theory and written under the supervi- been written collectively by economists who sion of Edward Taylor, was defended only in were related with the orthodox portion of the 1959 and published in 1960. Polish United Workers’ Party, the paper se- The year 1956 is generally regarded as verely criticized the achievements of “bour- the end of the Stalinist era in Poland. The geois economics” in Poland （Stankiewicz tragic events in Poznan´ in June 1956-when 2007, 576）. At that time, economics educa- workers’ demonstrations turned into bloody tion was based on mass reissues of books by riots-and a peaceful transition of power authors such as Bronisław Minc（ b. 1913） within the Communist party and government and Adam Schaff（ 1913-2006）. The latter in October 1956 were symbolic events of the co-authored （with Leon Brum） Talks on year. Economics, which was at that time the most The political changes of 1956 created ex- Ratajczak: Polish Economics and the Polish Economy 7 pectations for the introduction of solutions were supported by the authorities. Texts dis- that were typical of the Yugoslav system in cussing problems of economic growth in a Poland. In this model, which was implement- centrally controlled economy, with clear ref- ed in former Yugoslavia under Josip Broz erences to Keynesianism and associated Tito, self-management by workers played a mainly with Kalecki’s team,9） had a rather significant role. Unfortunately, it was soon limited impact on Poland’s social and eco- revealed that the new authorities, partially nomic policy. Of equal academic interest comprising former Stalinists, did not intend were research projects conducted by A. to accept more significant changes in the po- Wakar’s team, who attempted to analyze the litical and economic system. Although cer- socialist economy using categories related to tain institutions associated with the Stalinist the general equilibrium theory and Pareto apparatus of repression were dissolved and optimum.10） The intense activity of Wakar’s the state and society became partially open team even gave rise to the term “Wakar to Western contact, the changes did not actu- school,” which is still used today. Moreover, ally affect the essence of the system. various elements of the quantitative ap- Successive five-year plans, which deter- proach to economics were developed in the mined the direction of Poland’s economic post-1956 period. Examples of this included development, basically adopted the princi- works by Zbigniew Czerwin´ ski（ b. 1927） of ples of the Six-Year Plan. Strong preference Poznan´ , Zdzisław Hellwig （b. 1925） of was ascribed to industrial development, par- Wrocław, Władysław Welfe （b. 1927） of ticularly to heavy- and raw-material indus- Łódź, Paweł Sulmicki（ 1909-1980） of War- tries. The production of consumer goods was saw, and their teams. considered to be of secondary importance. The conflict between old and new in Moreover, the development of the so-called Polish economics in the post-Stalinist era non-productive sphere was regarded as es- surfaced as early as June 1956 at the Second sential, although not of primary importance. Congress of Economists. On the one hand, O. International economic relations were domi- Lange, E. Lipin´ ski, and M. Kalecki delivered nated by trade with the Soviet Union. How- papers that were rather innovative at that ever, an unattainable ideal was the concept time. On the other hand, certain other econo- of autarchy, which entailed an anti-import mists’ speeches indicated that Marxist ortho- preference rather than pro-export production. doxy and dogmatism continued to be strong- In economics, just as in Poland, the ly represented. post-1956 period was a time of unfulfilled According to certain historians of Polish expectations for major changes. Although economic thought, certain papers delivered certain previously dismissed professors re- at the Second Congress of Economists re- turned to their universities and books like the vealed signs of evolution from Marxist-Len- above-mentioned work by W. Wilczyn´ ski8） inist dogmatism to what would be referred to were finally published, a significant role con- in the future as revisionism. A good example tinued to be played by economists who were of this was the speech by W. Brus, the main faithful to Marxist-Leninist orthodoxy and ideologue of the First Congress of Econo- 8 経済学史研究 51 巻 2 号 mists. Rather than a radical break from premature retirement. Edward Łukawer Marxist ideology, developing-on the Marx- （1920-2007）, one of the best historians of ist base-concepts that were more or less economic thought in Poland, was dismissed critical of the political and economic realities from the Cracow University of Economics.11） of the time was the main idea. The tension Under the guise of providing career opportu- between “orthodox dogmatists” and “revi- nities for young and talented academics, the sionists” within Polish economics lasted until higher education act was amended in a man- 1968, which is another significant year in the ner that made it possible to promote people country’s history （Stankiewicz 2007, without requisite or formally confirmed aca- 579-80）. demic achievements. In most cases, this In Europe, 1968 is usually associated amendment was used to help those who held with the student revolt in France and the political views that were accepted by the au- Prague Spring, a period of liberalization in thorities. Czechoslovakia that ended with a Warsaw It must be added that, in the same year of Pact invasion of the country. In Poland, the 1968, Hungary launched an economic reform year 1968 is primarily identified with the that involved a partial departure from the “March events.” The student protests that oc- principles of a command economy toward curred in March 1968 were used by the au- market-oriented solutions, even if these were thorities to launch a witch-hunt against a rather limited. Moreover, Czechoslovakia- portion of the intelligentsia, particularly despite the suppression of its political reform those of Jewish origin. Although the Jewish through the invasion-contin- minority in Poland was no longer a statisti- ued a policy of improvement of the economy cally significant group, in the tragic after- much more effectively than was done in Po- math of World War II, a few people of Jew- land, particularly as far as the availability of ish origin played an important role in Po- consumer goods in the market was con- land’s political, social, and economic life af- cerned. ter 1945. One of the consequences of the In December 1970, increasing economic “March events” was a forced emigration of a problems caused further social unrest, which large proportion of people of Jewish origin led to the tragic events in Gdan´ sk, Elbla˛g, from Poland. It was because of the “March and Szczecin where protest demonstrations events” that numerous eminent economists by workers were bloodily suppressed by au- finally left Poland. These included thorities. However, the revolt led to changes Włodzimierz Brus, who eventually moved to in the Communist party leadership and gov- Cambridge University; Kazimierz Łaski（ b. ernment and revived hopes that Poland-al- 1921）, a member of Michał Kalecki’s group, though remaining within the for who settled in Austria and became a well- geopolitical reasons-could adopt a less or- known figure in the country’s economic cir- thodox system than that in the Soviet Union. cles; and Ignacy Sachs（ b. 1927）, who is The new authorities decided to radically currently considered a Polish-French econo- transform Poland’s economic situation by mist. M. Kalecki himself was forced to take opening-up its economy to the world, partic- Ratajczak: Polish Economics and the Polish Economy 9 ularly to highly developed countries with In the mid-1970s, Poland was burdened free-market economies. Technologies bought with an ever-increasing debt, which was not on credit and credit-based investment being handled effectively. In 1976, the gov- projects were expected to lead to a great leap ernment announced that it would be conduct- toward economic development. Consequent- ing an “economic manoeuver,” a policy of ly, the import and production of consumer austerity in investment and consumption. goods increased. Poles enjoyed greater free- Thereafter, growing social discontent caused dom to travel abroad than citizens of other the worker protests of June 1976, the nation- East European countries. However, it was wide strikes of August 1980, and the birth of soon revealed that in a system based on the Solidarity-an independent trade union concept of political monopoly, the limits of headed by Lech Wałesa. economic reforms are ruthlessly determined In economics, the years 1971-1980 wit- by transformations and decisions made in the nessed the publication of certain texts that political sphere. encouraged economic reforms; however, in Successive advisory committees com- the same period the position of economists posed of economists and designed to support whose views were hostile to anything that the government in economic transformation was associated with the free market and eco- met with a refusal to accept almost anything nomic calculation continued to remain rather that was remotely associated with extensive strong. It is worth noting that one of the con- economic decentralization and an increased sequences of Poland’s considerable（ in rela- role of classical, i.e., free-market, economic tion to other East European countries） open- mechanisms. An example of this was the es- ness to the West was that a relatively large tablishment of “Large Economic Organisa- number of Polish economists maintained re- tions”（ WOGs）. Modeled on large concerns, lations with colleagues in countries with these companies or groups of companies market economies. Moreover, although the were designed to operate using parametric relevance of the knowledge and experience instruments rather than tools typical of a gained in this manner was rather limited in command-economy system. However, in- Poland during that period, it proved extreme- stead of being instruments for economic ly useful in the initial years of the country’s modernization, WOGs became a symbol of transition. Polish economic problems due to lack of de- In the discussion of academic achieve- termination combined with inherent features ments in the 1970s in Poland, the work of of the system. Acting as monopolists who economists from the circle of Jan Mujżel did not face competitive pressure, WOGs of- （1923-2006） and Cezary Józefiak ten defied economic logic: On the one hand, （1932-2007） in Łodź12） must be mentioned. they maximized costs, on the basis of which A large group of economists who became profits（ defined as percentage of costs） were leading figures of the political scene in the determined; on the other hand, they mini- transition period belonged to the city of mized benefits, particularly in the qualitative Łodź.13） Equally interesting and far from aspects. Marxist orthodoxy were studies conducted in 10 経済学史研究 51 巻 2 号

other academic centers. In order to illustrate Further, serious long-standing economic the political realities of that time, a widely- problems on the one hand and the beginning discussed work by Władysław Balicki （b. of in the Soviet Union on the 1941）,14） a student of W. Wilczyn´ ski in other encouraged the Polish authorities to in- Poznan´ must be mentioned. A small number itiate the second stage of economic reform. of copies of the book were published by a Officially, it was never implemented because research institute, which made them practi- of an insufficient social support expressed in cally unavailable to the general reader the form of a national referendum. However, （Grzelon´ ska 2006, 56）. This was a typical certain ideas of the reforms were implement- example of the authorities’ policy: neither ed, and the most important among them was banning nor encouraging the publication of the economic activity act that was passed in studies whose results were perceived as un- December 1988 and popularly referred to comfortable or controversial. Warsaw was a （after its main author） as the Wilczek act. particularly active academic center. In this The law, which introduced considerable eco- context, the team headed by Janusz Beksiak nomic freedom, even today is believed to be （b. 1929） that continued the “Wakar school” a piece of simple but effective legislation. It tradition15） is worthy of special mention. was the Wilczek act that triggered an up- However, the Polish Spring of Solidarity surge of private entrepreneurship in Poland. did not last very long. In December 1981, the This was one of the last events in the eco- authorities imposed martial law, which still nomic history of the People’s Republic of arouses strong emotions and has created di- Poland. visions within Polish society. There is a con- February 1989 witnessed the beginning tinuing dispute among historians with regard of the Round Table talks. As a result of these to whether and to what extent martial law talks, members of the democratic opposition was inevitable in Poland’s geopolitical situa- were permitted to participate in the govern- tion at that time, and whether there was actu- ance of the country. The successive stages of ally a danger of Soviet invasion. The period the process initiated by the Round Table of martial law, lifted in July 1983, and the talks-the June 1989 election and the forma- years immediately after it represented a peri- tion of a government headed by former dis- od of an almost total economic disintegra- sident in August tion. Poland was an extreme example of a 1989-marked the beginning of what is ; the ration coupon system commonly referred to as transition in Poland. was universal. A team headed by Władysław Poland’s economy inherited an enormous Baka（ b. 1936）,16） a well-known economist, debt from the Communist era; this was com- developed principles of economic reform. pletely incompatible with the requirements The main concept was to gradually introduce of a market economy that is part of the world mechanisms typical of a market economy, economy. The Polish economy was on the such as prices determined by demand and verge of collapse. In 1988, the CPI supply or the possibility of a company’s rate was over 60%, and in 1989 it became bankruptcy for economic reasons. over 250%. In 1989, economic growth was Ratajczak: Polish Economics and the Polish Economy 11

0.2%. The distance, expressed in terms of Prepared by a team headed by L. Balcero- GDP per capita, between Poland and better- wicz17） within a mere 111 days, this package developed countries, grew considerably in- of ten bills marked a radical change in the stead of decreasing. Polish economic system. The plan proved to Thus, Polish economics carried the stig- be rather effective, at least in the battle ma of marginalization in mainstream world against visible signs of hyperinflation（ a CPI economics. An illustration of this was that in growth of almost 586% in 1990）. Positive world economics the two figures most close- changes occurred promptly in the country’s ly associated with Poland continued to be the economic structure; moreover, the govern- long-deceased O. Lange and M. Kalecki. ment budget was in surplus. The rate of eco- Fortunately, as has been mentioned earlier, a nomic growth accelerated, overtaking nu- relatively large proportion of particularly merous other countries also undergoing tran- younger economists remained in close touch sition, and reached a rather high level of with Western economics, which enabled +5.4% in 1993（ in contrast, in 1990 the rate them to use their knowledge and experience was -9.7%）. However, for the general pub- in the new political situation. A symbolic lic, the symbols of the figure in this group was have always been inevitable bankruptcies of （b. 1947） of the Warsaw School of Econom- state-owned enterprises and a considerable ics; he lent his name to the economic pro- rise in . Unemployment, prac- gram that was implemented in the initial tically unknown in a planned economy, be- years of transition. gan to soar, exceeding 16% in 1993. Un- doubtedly, the Balcerowicz Plan was partial-

IV Transition in Poland and its ly modeled on the concepts forwarded in the Consequences . At the beginning of Transition in Poland encompassed three ba- transition in Eastern Europe, this set of rules sic spheres: economic, political, and social. designed to help crisis-wracked developing In the economic sphere, the essence of trans- countries was treated as a universal prescrip- formation is a transition from a centrally tion. planned to a market economy. In the political In Poland, the Balcerowicz Plan contin- sphere, transition implies a shift from an au- ues to cause major disputes, particularly over thoritarian, or even totalitarian, system to a whether there was no alternative to it or democratic one. Finally, in the social sphere, whether its high social costs were actually transition comprises changing a society that inevitable. Today, the attitude toward the is based on imposed collectivism into one in Balcerowicz Plan remains a cause of the di- which a significant role is played by individ- vision among Polish economists: those who ual activity. are perceived as representatives of the liberal As has been mentioned earlier, in the or neo-liberal approach, and those who more economic sphere（ which is of particular in- or less directly subscribe to the concepts of terest in this paper） the beginning of transi- government interventionism or social liberal- tion is associated with the Balcerowicz Plan. ism. Leading supporters of shock therapy in- 12 経済学史研究 51 巻 2 号

volving a rapid market-based transition in- ple’s Republic of Poland（ the other party be- cluded-apart from L. Balcerowicz-the late ing the Communist party）. The years of the W. Wilczyn´ ski, Jan Winiecki, and numerous SLD-PSL coalition are difficult to evaluate members of the Society of Polish Econo- in simple terms. On the one hand, fears that mists and the Adam Smith Centre. The most the coalition may attempt to restore the pre- well-known protagonist of L. Balcerowicz transformation order did not become a reali- approach is Grzegorz Kołodko （b. 1949）, ty. On the other hand, although Poland en- who-like his main opponent-combined joyed a relatively high rate of economic research activity with government work as growth at the time, numerous difficult re- Vice-Premier and Minister of Finance （in form-related decisions were avoided, particu- the periods 1994-1997 and 2002-2003）.18） larly regarding welfare spending. Other names within this camp include An attempt at social reform was made by Zdzisław Sadowski（ b. 1925）, who remained the next coalition government between the President of the Polish Economic Society, Solidarity Electoral Action（ AWS） and the the largest organization of its kind, for nu- Freedom Union（ UW）, which came to pow- merous years; Jerzy Osiatyn´ ski（ b. 1941）, er after the 1997 election. Thereafter, follow- known, among other things, for his populari- ing the breakup of the coalition, a minority zation of Kalecki’s ideas; Tadeusz Kowalik AWS government introduced a legislation （b. 1926）, one of the best experts on the his- package that reformed, albeit insufficiently, tory of economic thought in Poland. Both welfare spending. On account of its close ties camps won the support of a few Polish econ- with the Solidarity trade union, it was rather omists who either returned from emigration difficult for the government to implement at the beginning of the transformation period more radical reforms. or attempted to play a more active part in The SLD-PSL coalition returned to pow- Poland while continuing to live abroad.19） er in the 2001 election; after the breakup of As early as 1993, growing social discon- this coalition, SLD formed a minority gov- tent associated with social costs of the re- ernment. The main achievements of that pe- form and the instability in the political riod include the conclusion of Poland’s EU sphere enabled a coalition of parties with accession negotiations and joining the EU roots in the Communist period to assume （May 1, 2004）. Apart from adopting a new power again. The largest proportion of the Polish constitution in 199720） and joining electoral vote was obtained by the Demo- NATO in 1999, this was one of the most im- cratic Left Alliance（ SLD）, a left-wing party portant events in the history of Polish trans- that was comprised of former members of formation. the Communist party（ PZPR）-particularly Unfortunately, the public associated the its more liberal fraction-and the Polish SLD government with various negative phe- Peasants Party（ PSL）, which partially con- nomena that were symptoms of what is tinued the tradition of the United Peasants called a weak state and peripheral . Party（ ZSL）. ZSL was one of the two satel- In 2005, under the banner of a radical re- lite parties that could act legally in the Peo- structuring of the state, power was assumed Ratajczak: Polish Economics and the Polish Economy 13

by the coalition government of the Law and February 2003, when it peaked at 20.7%. Justice party（ PiS） and two smaller coalition Further, Poland is one of the few European partners. The main aim was to build a countries that have a chance of escaping re- “Fourth Republic” which, in terms of ethical cession in 2009. and moral standards, was to be superior to Polish economics has transformed over the Third Republic, a product of the transi- the two decades of transition, just as the tion period. In economic terms, Fourth Re- Polish economy has. It is worth noting that at public ideologues made rather explicit refer- the beginning of the transition period, certain ences to the statist concept.21） people suggested a radical break with the Due to the difficulties of maintaining the traditions of the previous system. This would coalition, an early election was called in have involved invalidating academic degrees 2007; as a result of this, the Civic Platform and titles awarded in the Communist era, or Party（ PO） and the Polish Peasants Party at least in re-verifying them with the help of （PSL） assumed power. PO, the senior coali- invited Western economists; however, even- tion partner, is a center-right party that is tually, nothing of this kind happened. Moreo- economically liberal and moderately con- ver, there was no change in academic staff, servative in social and moral matters. for example by imposing premature retire- In order to recapitulate this brief descrip- ment onto those whose entire academic ca- tion of Polish politics since the beginning of reers had been formed in the People’s Re- transition, the instability and volatility, un- public of Poland. When the derstandable in a young , of the party was in power, an attempt was made to country’s political scene must be empha- conduct lustration, i.e., to disclose the names sized. Some of the parties that formed coali- of people, including those in academic cir- tion governments in the past（ AWS, UW） cles, who had cooperated with the Commu- no longer exist; others have lost much of nist secret police. However, this idea did not their popular support（ SLD）. Although po- materialize completely. litical instability is not conducive to eco- The lack of implementation of various nomic development, there is no doubt that radical initiatives against the academic com- none of the governments has taken action to munity since the beginning of transition can evidently undermine the principles of a mar- be partially explained by a greater liberal ket economy. Poland is classified as a coun- line of thought after 1956 in Poland as com- try that continues to possess an unsatisfacto- pared with some other East European coun- ry level of economic freedom with a rela- tries. Owing to this relative liberalism, there tively high（ for European standards） level of were rather few economists or other mem- corruption. However, at the same time it is a bers of the academic community （even if country that is visibly reducing its distance they were very influential figures） who sup- from better-developed countries. Although ported the orthodox or dogmatic versions of has been increas- Marxism. In Poland-unlike in the Soviet ing recently（ 11.0% at the end of October Union-it was not obligatory to quote Marx, 2009）, it continues to be much lower than in Lenin, or the current First Secretary of the 14 経済学史研究 51 巻 2 号

Communist party in almost every economic consequences. publication. Consequently, a large proportion Both the Polish economy and Polish eco- of Polish economists were those whose re- nomics would probably have been at a dif- search was characterized by a relatively low ferent developmental stage today, had the level of ideological contamination. Polish state managed to avoid its fate as ear- The beginning of transition in Poland ly as the eighteenth century, when the coun- brought about a radical change in economic try was partitioned, had the world not fought curricula. Fundamental subjects, such as po- two world wars in such a short period of litical economy of socialism and capitalism, time, and had World War II not led to a were replaced with macroeconomics and mi- world divided by the Iron Curtain. On the croeconomics. Polish economists began to other hand, given the country’s complex situ- adapt their research to major trends of mod- ation, it must be stated that the entire period ern economics. A majority of them sub- of two decades of transition analyzed here scribes to the ideas of what is known as have produced very positive results. mainstream economics although recent , Marek Ratajczak: Poznań University years have witnessed an increased popularity of Economics, Poland of various types of institutional and behavio- ral economics. The weakness of Polish eco- Notes nomics continues to be the limited number 1） A discussion of the complexities and evo- of publications in prestigious English-lan- lution of political and economic terminology guage periodicals. In effect, Polish econom- used in Poland in the years 1945-1989 is be- ics continues to be little known in the world. yond the scope of this paper. As mentioned As has been mentioned earlier, the academic above, according to official terminology, Po- community still identifies Polish economics land’s political system of that time was re- ferred to as socialism. The system was con- with names such as O. Lange and M. Ka- sidered to be a transitional stage that preced- lecki. However, the increasing international ed the emergence of a Communist system at activity of younger Polish economists raises an unspecified time in the future. It must also hopes that in the near future Polish econom- be remembered that the word “communism” ics will be associated with the achievements was not included in the name of the ruling of a much larger number of economists. party, which enjoyed complete political mo- nopoly. The organization’s name was the V Conclusion Polish United Workers’ Party（ PZPR）. Vari- The aim of the present article that describes ous names were used to refer to the econom- the development of the Polish economy and ic system, the most common one being “cen- trally-planned economy.” Polish economics was not to conduct a de- 2） In this context, schools of commerce such tailed analysis of hard statistical data or in Cracow, Poznan´ , and Warsaw, respective- present the achievements of particular schol- ly, must be mentioned. All these privately ars. Instead, the author attempted to familiar- owned institutions were nationalized several ize the reader with the complexity of the years after World War II. Today, they are Polish developmental path and its ensuing Poland’s leading economic research and edu- Ratajczak: Polish Economics and the Polish Economy 15

cation centers with a university status. Apart land was parceled out among landless, small, from these three, there are universities of and medium-sized farmers on the basis of a economics in Wrocław and Katowice, facul- land reform decree. ties of economics in various other academic 7） Only in 1959, after the end of Stalinism, institutions, and a large number of mostly Oskar Lange was permitted to publish the privately-owned higher schools of econom- first volume of Ekonomia Polityczna（ Politi- ics that were established after 1989. cal Economy）, which is considered to be his 3） It was at the Jagiellonian University that main work. Its unfinished second volume Carl Menger, an eminent representative of was published only posthumously. The book, the Austrian school, obtained a doctoral de- full of departures from Marxist-Leninist or- gree in law. thodoxy, was a subject of numerous disputes 4） Michał Kalecki gained international rec- and debates. Further, Lange’s Całos´c´ i Ro- ognition in 1937 for publishing A Theory of zwój w S´wietle Cybernetyki （Totality and the Business Cycle. It was an expanded Eng- Development in the Light of Cybernetics） lish-language version of his earlier work （1962） was one of the first books on cyber- published in Polish in 1933. At that time, Ka- netics and systems theory to be published in lecki was working for the Institute of Studies the Communist bloc. of Economic Conditions and Prices, which 8） What was even more unacceptable for was established on the initiative of Edward adherents of Marxist orthodoxy was Lipin´ ski and contributed enormously to the Wilczyn´ ski’s next book, Rachunek Ekono- development of economic research in Po- miczny a Mechanizm Rynkowy （Economic land. An indication of Kalecki’s position was Calculation and the Market Mechanism） the fact that he was shortlisted for The Sver- （1965）. This title itself suggested that the iges Riksbank Prize in Economic Sciences in author was referring to the officially rejected Memory of Alfred Nobel, which has been concept of market regulation. awarded since 1969. It is supposed that had 9） Of special significance was Kalecki’s it not been for his untimely death, Kalecki Zarys Teorii Wzrostu Gospodarki Socjal- would have won the prize. istycznej（ An Outline Theory of the Growth 5） The concept was close to what was com- of the Socialist Economy）（ 1963）. monly referred to as Finlandization. Al- 10） Two examples are Morfologia Bodz´ców though it was perceived by Soviet leaders as Ekonomicznych（ Morphology of Incentives） an enemy country（ the Soviet-Finnish war, （1963）, of which Wakar was the author, and then World War II）, , which bordered Zarys Teorii Gospodarki Socjalistycznej（ An the Soviet Union, managed to remain, politi- Outline Theory of the Socialist Economy） cally and economically, part of the Western （1965）, of which he was the editor. world. However, Finland had to pay the price 11） Łukawer’s last, posthumous, publication for this through various concessions related was a book on the development of Polish to the status of a that avoided economic thought, entitled O Tych z Naj- any action that could be perceived as anti- wyz˙szej Półki, Czyli Rzecz w Sprawie Nasze- Soviet. go S´rodowiska Ekonomicznego（ On Those 6） It must be indicated that resistance to the from the Top Shelf, or a Piece on Our Com- collectivization of was munity of Economists）（ 2009）. caused, among other things, by the fact that 12） Among other things, the two economists only a few years earlier in September 1944 co-authored a widely discussed monograph, 16 経済学史研究 51 巻 2 号

Reprodukcja w Gospodarce Socjalistycznej plicit reference to Jozef Schumpeter’s famous （Reproduction in a Socialist Economy） Capitalism, Socialism, Democracy）, Wolnos´c´ （1974）. i Rozwój: Ekonomia Wolnego Rynku（ Free- 13） Examples include Marek Belka （b. dom and Development: The Economics of a 1952）, Minister of Finance, then Prime Min- Free Market）（ 1998）, and Pan´stwo w Prze- ister in 2004-2005; Jarosław Bauc（ b. 1957）, budowie（ The State under Reconstruction） Minister of Finance in the period 2000- （1999）. 2001; and Jerzy Kropiwnicki （b. 1945）, 18） A few examples of Kołodko’s numerous who occupied various ministerial posts in publications are Transformacja Polskiej Gos- 1991-1993. podarki: Sukces czy Poraz˙ka?（ The Trans- 14） Zarys teorii nierównowagi popytowej（ An formation of the Polish Economy: A Success Outline Theory of Demand Disequilibrium） or a Failure?）（ 1992） and Kwadratura pie˛- （1979） was compared to the works of J. Kor- cioka˛ta: Od Załamania Gospodarczego do nai, the best-known East European econo- Trwałego Wzrostu（ Squaring the Pentagon: mist in the West. Further, it must be noted From Output Collapse to Sustained Growth） that Shortage Economy, Kornai’s flagship （1993）. A lively debate accompanied the work, was published in Poland under a more 2008 publication of We˛druja˛cy S´wiat（ World euphemistic title-Niedobór w Gospodarce on the Move）, a book that presented a syn- （Shortage in Economy）（ 1985）. thesis of the author’s views on the economic 15） Równowaga Gospodarcza w Socjalizmie phenomena in today’s world and more. （Economic Equilibrium in Socialism）, co- 19） Those who returned to Poland included authored by Urszula Libura （now Stanisław Gomułka（ b. 1944） from London Grzelon´ ska） and published for the first time School of Economics; he was perceived as a in 1969 was a book that sparked off a partic- committed supporter of the Balcerowicz ularly intense debate. Plan. Moreover, I. Sachs and J. Drewnowski 16） Baka also co-chaired the economy work- reappeared on the Polish economic scene. group as a representative of the government The year 1992 witnessed the publication of during the Polish Round Table talks, which the book Od Marksa do Rynku（ From Marx precipitated systemic transformation in Po- to the Market） by W. Brus and K. Łaski, in land. The other co-chairperson of the work- which the authors re-evaluate the concept of group was Polish economist Witold Trzecia- the so-called socialist market economy. kowski（ 1926-2004）, a representative of the 20） It is worth noting that clause 20 of the opposition. Constitution describes the Polish economic 17） Balcerowicz, an economist of the Warsaw system as a social market economy. Histori- School of Economics, was Vice-Premier and ans of economic thought immediately asso- Minister of Finance in Mazowiecki’s govern- ciate it with the concepts of German Ordo- ment（ 1989-1991）. He held the same posts liberalism and the postwar West German in the period 1997-2000; Further, in the pe- economy. However, this clause in the Polish riod 2001-2007, he was Governor of the Na- constitution can barely be treated as a simple tional Bank of Poland. Balcerowicz present- continuation of that tradition. ed a synthesis of his views on transformation 21） The officially used numbering of succes- and economic principles in Socjalizm, kapi- sive republics omits the People’s Republic of talizm, transformacja （Socialism, Capital- Poland. The years of the reign of the People’s ism, Transition）（ 1997）（ the title is an ex- Republic of Poland are treated as a period Ratajczak: Polish Economics and the Polish Economy 17

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