Eastern Europe: The Bitter Fruits of Capitalist Restoration – Poland

By Paul Newberry, CWI Member in Poland

Capitalism has had six years to carry out its program of restoration in Eastern Europe. These countries can now be characterized as being capitalist countries. However, this process is not one hundred percent complete.

Capitalism faces enormous problems for its future development. This is shown clearly with the example of Poland.

Poland was the first European country to apply “shock therapy” in terms of the widespread application of neo-liberal policies, but now Poland is one of the last countries in terms of the completion of the privatization of state industries. Heavy industries in Poland such as steel, coalmines and shipyards are still under state ownership. It is an irony of history that the Gdansk shipyard, which was the birthplace of ‘Solidarity’, is now facing bankruptcy. The bankruptcy of the shipyard in Gdansk is seen as a test case for the government. If they succeed in closing it down then it will pave the way for further closures in heavy industry.

The CWI’s perspective from the beginning was that capitalism could not develop countries in Eastern Europe and the former Soviet Union. The small growth observed in recent years does not contradict this. This limited growth followed a catastrophic fall in the Gross Domestic Product (GDP) in the first years following the collapse of Stalinism. Poland has just returned to the GDP level of 1989. At the present rate of growth it will take 50 years for Poland to catch up to the level of the West. Unemployment is still high, at 14.4 percent and inflation is 22 percent. The growth experienced in the last few years has not improved the living standards of workers significantly.

In Poland the situation exists where pensioners, public sector workers, teachers and health workers have become pauperized. Even according to the government’s official statistics 13 percent of Polish population lives in poverty – over five million people. Half of Polish families live “in need”.

The main problem is that capitalism cannot provide the enormous resources needed to modernize industry in Eastern Europe. In 1995 foreign investment in the whole world came to $325 billion but in Eastern Europe only $12 billion were invested. That figure is the same as for foreign investment in Sweden. Poland last year received only $2.5 billion in foreign investment. Since 1989 it has received only $8 billion in total. This is just a drop in the ocean of what is needed.

The Polish economy is still weak and vulnerable. There has been some investment in car assembly plants in Poland, which at this stage is only very small-scale production and employs very few workers. But, the development of this section of industry depends on the domestic market and the German market.

Growth in Poland has been to a large extent led by exports. But now, almost like a pair of scissors opening up, a large gap has developed between exports and imports . Imports are rising and exports out of Poland are falling. A down-turn in the German economy will cause enormous problems in Poland.

In terms of developments in political organizations there have been big changes. ‘Solidarity’ today is a totally different organization from ‘Solidarity’ in the early 1980s. When ‘Solidarity’ was first set up it was more than a trade union. It was a revolutionary movement that had some similarities with the soviets which were formed during the Russian revolution. Many of the organizations which were thrown up during the struggles in the early 1980s could be considered as an embryonic form of workers’ control.

Of course, after martial law (Jaruzelski’s coup in 1981) the situation changed and the new structures were almost empty of workers.

In 1989 ‘Solidarity’ formed a government in Poland and after a while pro-capitalist parties emerged from the ‘Solidarity’ organization. During the shock therapy period 1990-92, Solidarity formed a protective umbrella over the pro-capitalist governments. This was a period of sharp decline in the economy and of savage attacks when ‘Solidarity’ held back strikes and protests. It has become increasingly Catholic, nationalist and even anti-Semitic. In the large Ursus tractor factory in Warsaw, this has become even clearer. There the leader of ‘Solidarity’ is a neo-fascist!

This process is a reflection of the lumpenization of large sections of society. Political parties in Poland are really divided into two camps. On the one hand there are parties which had their origins in ‘Solidarity’ but who are now independent of that movement. These range from the extreme right Catholic nationalist parties to bourgeois liberal parties. On the other hand there is the ex-Stalinist bloc, the biggest component of which is the Social Democratic party. Three years ago the Social Democrats won the parliamentary election on a wave of discontent and formed the government. Before the elections, the Social Democrats in Poland were very similar to those in the Czech Republic. During the parliamentary elections they made many promises and their slogan was: “It does not have to be so bad, the attacks don’t have to continue”.

But when they came to power they carried out the same pro-capitalist policy as previous governments. The Social Democrats have more businessmen in their party than the bourgeois liberal parties. This is because the bureaucrats have become capitalists. Linked to the Social Democrats is the ex-Stalinist trade union called OPZZ. During the first ‘Solidarity’ government, OPZZ organized strikes and protests against “shock therapy” and now it is forming a protective umbrella over the government. During the presidential election last year, the Democratic Left or the Social Democratic candidate Kwasniewski defeated Walesa. However, although there was a polarization in society, it was not expressed in terms of enthusiastic support for Kwasniewski, but hatred against the opposing candidate.

The Solidarity camp attacks the Social Democrats as “communists”. But actually the Social Democrats have a more neo-liberal program than ‘Solidarity’. ‘Solidarity’ now opposes some “wild” privatizations and want some kind of state intervention into the economy.

Last year the mass privatization program began in Poland – a program quite similar to the “coupon” system in the Czech Republic. Polish citizens could register and pay a small nominal fee and received a certificate which in the future would be exchanged for shares. For many years these enterprises will be controlled not by the shareowners but by the National Investment Funds. These Funds will be responsible for re-structuring the enterprises, for making mass redundancies and attacks on workers. While most Poles have certificates and are participating in this program, a referendum at the beginning of this year showed that 72 percent were actually against this program and against the National Investment Funds. At the same time, 95 percent of the population supported the idea of a similar program but without the National Investment Funds.

This, in a way, expresses the mood for “fair privatization” – the idea that state property should be distributed equally to all Poles. However, whatever program is adopted, the effects will be the same. It will still lead to a concentration of capital.

The privatization program means different things to different people. Some people think that they can become small investors or capitalists, but others think they can regain control over the workplaces. Actually a party has been set up that supports this idea called the Movement for the Reconstruction of Poland (ROP). They had a candidate in the presidential elections who won 9 percent of the votes, which is a respectable figure. They took their campaign to the big industries. It was a very opportunistic, populist campaign against selling off state industries to foreigners and against “wild” privatization. This party has gained a certain echo and received 15 percent support in a recent opinion poll.

Some of the opposition to the effects of privatization has been channeled into rightwing, nationalist parties. This of course is a contradiction, but the mood that exists in Eastern Europe and the former Soviet Union is very contradictory. Although a consciousness against privatization is developing there is no genuine socialist alternative through which such opposition can be directed.

Inevitably there will be a struggle by workers to defend living standards and jobs and against privatization. But in Eastern Europe and the former Soviet Union the members of the CWI are fighting against the stream.

It will be objective events that will turn the tide and the working class in Eastern Europe and the former Soviet Union will return to its historic traditions.

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