Poland: The workers’ paradise overthrown by workers
Poland was one of the poorest countries in Europe, but since an uprising that overthrew socialism it is now set to become richer than the UK, says Rainer Zitelmann
In recent years, I have visited Poland more frequently than any other European country, and I am always amazed by the country’s remarkable economic development and rising standards of living. Poland has been Europe’s growth champion for several decades.
Before I travel to a country, I begin by studying its history so that I can understand it better. That’s why I met Alicja Wancerz-Gluza, co-founder of the Karta Center in Warsaw. The Center encompasses 5,000 books and brochures, around 35,000 newspapers, 300 posters and 1,000 postcards from the anti-communist underground movement.
During our conversation, Alicja explained the realities of everyday life in Poland under the socialist planned economy. She showed me the pile of ration cards Polish people needed to buy food and other products until the collapse of the socialist regime in the late 1980s. The first ration cards were for sugar in 1976. Until the end of socialism, more and more of these ration cards were added – for all kinds of products, including meat, fat, butter, detergent, soap, cigarettes, gasoline and even shoes.
“It was a truly special occasion,” recalled Alicja, “when I got a special card from the registry office that would allow me to buy white tights for my wedding. I was also given a certificate stating that because we were getting married we were allowed to buy gold wedding rings in a jewelry store. But we didn’t have the money for that, and we didn’t want rings anyway. So, there were special cards for all occasions, for example, for a funeral you could get a card for black pantyhose.”
It was a truly special occasion when I got a special card from the registry office that would allow me to buy white tights for my wedding
But just because you had a ration card didn’t mean you could go out and buy what you wanted. Often you had to stand in line for hours. People also exchanged their cards if they needed a different product to the one their card allowed. For example, a vodka card (an adult was allowed to buy one bottle per month) could be exchanged for a coffee card.
To buy furniture, a washing machine or a television, people had to stand in what were known as “kolejki społeczne” (social lines). In some cases, they had to join the line every day for a month or two, queuing for hours at a time. Family members joined the queue and waited in line and swapped places with other family members every few hours. Often it was the grandfather or grandmother who were chosen to stand in line because they were the most likely to have the time to persevere in line for many days.
It wasn’t so long ago that Poland was one of the poorest countries in Europe. In 1989, a Pole earned the equivalent of just $50 a month, a tenth of that of the average Westgerman, and even after taking account of the differences in purchasing power between the two countries, the value of a Polish worker’s take home pay was one-third that of a Westgerman employee. Poles were poorer than Ukrainians at the time, and GDP per capita was only half that of Czechoslovakia. Inflation in Poland was 260 percent in 1989 and 400 percent in 1990.
As late as 1910, the average income in Poland was 56 per cent of that of a Western European. But by the end of the socialist era, which spanned the years from 1945 to 1990, incomes had fallen dramatically: by 1990, a Pole earned only 31 per cent of the average salary in Western Europe.
Capitalist reform
However, through a consistent program of capitalist reforms, the standard of living in Poland has risen considerably and, by 2016, had reached 57 per cent of the level of Western Europeans, whose standard of living had risen considerably after the war. Across all income groups, Poles have benefited from capitalism.
As so often in history, it is important not to underestimate the commitment and influence of certain individuals. First and foremost, there is former Finance Minister Leszek Balcerowicz, who I met in Warsaw. A free-market economist, Balcerowicz, who is guided by the teachings of Ludwig von Mises and Friedrich August von Hayek, was Finance Minister in Poland’s first democratic government, which was elected in 1989. He was also Chair of the National Bank of Poland (2001–2007) and twice Deputy Prime Minister of Poland (1989–1991 and 1997–2001).
Balcerowicz developed a program of capitalist reforms that was later called “shock therapy.” “Based on my previous studies of reforms and my realization of how dramatic the economic situation in Poland was in 1989”, he said, “I was deeply convinced that only a radical strategy could succeed.”
It is in the nature of such radical reform programs that the situation initially gets worse, at least temporarily, although the Poles were more than rewarded for their perseverance, as Balcerowicz’s program ensured that in 1992 Poland became the first former socialist country to get back on the economic growth track and was the basis of the country’s subsequent success.
The communists described their country as a paradise for workers and peasants, but in Poland it was the workers who overthrew the system. The imposing Europejskie Centrum Solidarnosci, or European Solidarity Centre, serves as a poignant reminder of this historic event in Gdańsk, a city I had visited. The Gdansk shipyard is a uniquely historical place because this is where the end of communism began. Poland’s entire post-war history is punctuated by repeated strikes and ongoing protests by the country’s workers, many of which were brutally suppressed. For example, there were the strikes that started in the Gdansk shipyard on 14 December, 1970. On the night of 15 December, the striking workers were surrounded by army units with tanks. When the workers left the plant, the soldiers opened fire on them before marching onto the premises. That same day, strikes also broke out at the Gdynia shipyard. There were fatalities and injuries. In prisons and temporary detention centers, demonstrators were beaten to unconsciousness and seriously injured. Strikes and demonstrations also occurred in many other cities during that week of December 1970, and resulted in the loss of 45 lives. Of the victims, 12 were under the age of 20 and 24 were under the age of 30. In total, 1,100 people were wounded, the majority of whom were workers.
The shipyard is adorned with memorial plaques listing the names and ages of the workers who were killed. Some were only 15, 16 or 17 years old. An ideology conceived by intellectuals, whose goal was a paradise for the workers, was brought down by workers’ uprisings.
Excerpt from Rainer Zitelmann, The Origins of Poverty and Wealth: My world tour and insights from the global libertarian movement