The Roots of the Polish Economic Crisis (January 1982) (original) (raw)

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Ernest Mandel

(January 1982)

From International Viewpoint, No. 0, 28 January 1982, pp. 29–34.
Marked up by Einde O’Callaghan for the Marxists’ Internet Archive.

The economic crisis afflicting Poland is the most severe ever experienced by a post-capitalist society after it has achieved a modicum of stability, that is, outside of phases of war and civil war. For three consecutive years, the level of production has dropped. In 1979, it declined by 2%, in 1980 by 4%, and in 1981 by no less than 17%. This is not of course a capitalist crisis of overproduction, which is marked by a piling up of uninvested capital and unsaleable commodities, leading to mass unemployment and a decline in incomes. It is rather, as we have stressed on many occasions, a crisis of underproduction of use values. The result is shortages of all sorts of commodities, leading to the progressive disorganization of the entire productive machine, but with the incomes of the population remaining relatively high. However, this is only a capsule description of the crisis in Poland, not an explanation of it.

What are the economic roots of this crisis? And what are the connections between these roots and the peculiar structure of post-capitalist society “frozen” in its transition toward socialism by the dictatorship of the bureaucracy? To what extent could such a crisis be avoided under a system of socialist democracy and planned workers self-management even if, in the absence of victorious socialist revolutions in the main imperialist countries, the pressure of the world market continued to bear on a country where such a democratic system existed?

Answering these questions takes on a still greater importance when you consider that the symptoms of similar, although much more limited crises are already showing up in Romania, Hungary, and even in Czechoslovakia and the USSR. New breakdowns as massive as in Poland are not likely, but a marked decline in growth rates can already be seen. Semi-stagnation for one or several years is quite probable in these countries.

The immediate cause of the present crisis is the “new course” set for the Polish economy after Edward Gierek took power, that is, after 1970–71. Alarmed by the Baltic port strikes of 1970, the new leadership of the Polish bureaucracy, with the Kremlin’s backing, sought to achieve a social consensus embracing the majority of the urban population, as well as a section of the peasantry, above all the well-to-do peasants. This was to be based on an accelerated modernization of Polish society and its adaptation to Western-style consumption and life. The plan required a veritable “explosion” of productive investments devoted to the creation of a “second Polish industry,” or a “second Poland.” Massive borrowing in the capitalist countries was to make it possible to finance this gigantic effort without lowering the living standard of the working people (which in any case was impossible in the context of the new relationship of forces created by the 1970 strikes).

The internal logic of Gierek’s program called for the following steps:

In itself this was not a crackpot scheme, as some claim today. (Notably, the very people who dismiss it today gave it a vote of confidence before, that is the experts in Comecon circles, the Warsaw technocrats, and the Western bankers). But it was shot through with dangers, since it tended to accentuate all the imbalances and distortions inherent in bureaucratic planning and management.

Worst of all, it dangerously magnified the basic disequilibria that had been present in the nationalized Polish economy since the 1950s. One of these was the imbalance between economic and social investments. The impact of the latter has been gravely underestimated by all economists educated under Stalinism The others were the imbalance between heavy and light industry, between production and distribution (the underdevelopment of services and the distribution network is one of the aspects of the systematic neglect of social investments), and so on.

The entire economy was shaped by the material incentives of the bureaucrats, which were the only motive force in realizing the plan and all economic projects, including Gierek’s program. That is, it was marked by the absence of socialist democracy, by the absence of social control over economic life. In this context, the Gierek plan led to a considerable aggravation of these disequilibria. Imbalances appeared within and between the various industries, which means clearly a partial breakdown of planning.

Every bureaucratic clique–they seemed to form mainly on the basis of the various regions–wanted to build its own model plant, its own pole of development. This created a lot of new jobs for high paid “professionals, “ a lot of new emoluments, a lot of new sources of excessive privileges and power, to say nothing of the impact that these new enterprises had on the economy as a whole.

The close connections between this “second Polish industry” and Western credit obviously provided another source of corruption. Relatively easy access to foreign credits increased the tendency to import goods rather than produce them at home. [1] Bribes from Western firms were an excellent means of persuading the Polish bureaucrats to step down the primrose path to which in any case their natural inclinations directed them. A whole parallel market (a quasi-legal if not legalized one) [2] developed in Poland for consumer goods that could be bought only for dollars or gold. The “material incentives” (a “Communist principle” that might be disputed only by “petty-bourgeois equalitarians”) thus came to distort even the flow and composition of productive investments.

On top of this, the “gigantomania” inherited from Stalin definitively tipped the nationalized Polish economy toward chronic and generalized imbalances. A giant steelworks such as the one in Katowice did not have a sufficient supply of energy. The URSUS tractor factories had to import spare parts from the West that cost more than the finished product itself. Coal mines stopped working because of the lack of engine belts that “someone” had forgotten to include in the import plan, and which anyway would have had to be paid for with the coal that had not been produced and therefore was not exportable. And so on, and so on.

Imbalances got worse from year to year, or even from one half of the year to the next. The delays in getting new plants into production grew longer and longer. This imposed increasingly heavy burdens – fixed costs and overhead costs not repaid by additional production – on the economy. There was a dangerous drop in the rate of utilization of productive capacity because of the lack of certain use values necessary to realize this potential (the current rate of utilization is estimated at 75%) The economy was clearly heading for disaster sooner or later.

Competent Polish economists raised the alarm before the summer 1980 strikes. [3] The strikers themselves raised an outcry against this downhill slide. Far from having caused the crisis, the strikes were a spontaneous response of workers trying to stop this course toward disaster before it was too late. To blame the workers for the crisis, as the Soviet bureaucracy does, along with its agents and lawyers, as well as the habitual opponents of strikes in the West is shameless mendacity. Altogether, strikes cost the Polish economy the equivalent of three or four workdays of overall production since the summer of 1980, that is, less than electrical power cuts caused by bureaucratic waste and shortsightedness, and were insignificant by comparison with the sum total of 60 workdays per capita of the economically active population that were lost in 1980–81.

World Capitalist Crisis

The catastrophic consequences of the Gierek program were magnified by the impact of the international capitalist economic crisis on the Polish economy. More precisely, the Gierek program, as well as the “Common Program” of the Union of the Left in France, like all the “theoretical” projections of the Stalinist bureaucracy at the beginning of the 1970s, was based on the assumption that there would be no further crises in the international capitalist economy, of at least no grave ones. In general, the bureaucracy expected the capitalist economy to continue to grow at a rate comparable to that of the 1960s. This projection involved two assumptions that were disastrous for the Gierek program.

The first reaction of the bureaucracy was to divert a large part of production that had been allotted for domestic use (in particular, coal and meat) toward the export sector, in order to soak up the increase in the balance of trade deficit, and to appeal for additional foreign credits in order to reduce the burden of the debt on production and current revenues, and to allow depletion of the country’s economic reserves. [4] But these three remedies proved worse than the disease.

The reduced supply of coal to the electric power stations and to the homes of the workers and peasants during the winter of 1979–80 began to depress both industrial and agricultural production. The increased foreign debt brought a mushrooming of interest payments, which in the end absorbed almost all the currency obtained from current exports.

What exactly are the implications of this analysis? The capitalist economic crisis did not cause the Polish crisis. The Polish economy was capable of continued growth while production was dropping in the West (this is in fact what happened in 1974–75). To the extent that the Polish economy is not governed by the law of value, it can avoid crises of overproduction. It can enjoy a more or less stable rate of investment and growth year in and year out. To the extent that the Polish economy continues to be influenced by the law of value (whose effects are transmitted both by trade with the capitalist countries and through exchange with the private agricultural sector in Poland), it clearly cannot escape certain negative results of the capitalist crisis, such as, for example, the failure of exports to meet expectations. But these effects only took on the catastrophic scope that they did in Poland because of a wrong economic policy, because of excessive dependence on trade with the capitalist countries, and because of the interlocking of these factors with the general and structural results of bureaucratic management.

The Long-Term Consequences of a Structural Weakness

In the course of the “Gierek Era” a structural weakness of the Polish economy inherited from the “Gomulka Era” began to have graver and graver repercussions in increasing the imbalances and as a source, at first potential and then active, of a crisis of underproduction. It was the survival in Poland of the largest private agricultural sector that exists today in any post-capitalist society, including Yugoslavia. Since Gomulka’s “counter-reform” in 1956, 80% of the land in Poland has been in the hands of private farmers.

In itself, this “counter-reform” was unavoidable, inasmuch as in the “Bierut Era” the collectivization of agriculture was carried out against the will of the peasants. All of Marxist tradition, from Engels’ famous articles on the French and Italian peasantry in 1894 to the theses of the Left Opposition in the Soviet Union, is opposed to any attempt to collectivize agriculture on a large scale without the conscious support of the peasants. The forced collectivization carried out by Stalin in fire and blood produced an economic, social, political, and moral disaster so great that to this day, a half century later, the consequences have not yet been overcome in the USSR. By comparison with such a catastrophe, even the present Polish economic crisis is clearly a lesser evil.

In reality, however, there is no need to choose between these two evils, a “great” disaster and a catastrophe limited in time. It is necessary to understand the operation of the economic and social contradictions that underlie the problem, the interconnection between rate of growth of nationalized industry and the living standard of the workers and that of the peasants, the growth trends in cooperative and collective agriculture and in private agriculture. Out of these five variables, it is possible to work out equations for solving the problem, if it is understood that these contradictions are real ones for which solutions have to be found and no attempt is made to hide them for the sake of encouraging political passivity or a false sense of security.

However, far from undertaking a policy designed to progressively eliminate all these contradictions, Gierek chose options that led to a considerable worsening of these problems.

By accentuating the imbalance between investments in industry and investments in agriculture, the “Gierek course” increased the lag of agricultural behind industrial production, thereby endangering the plans for export and for supplying the urban population. An irrational policy of underinvestment in private agriculture (which, remember, represents 80% of the land under cultivation) further increased the tendency toward stagnation in agricultural production.

The reaction of the bureaucracy to the flareup of workers struggles aggravated the problem of price scissors. In order to forestall new explosions of working-class anger, the sale prices of agricultural products were in effect frozen, while the farmers’ production costs rose sharply in response to the increase in the price of energy. More than ever, building materials and industrial consumer goods were diverted from the villages. A vicious circle developed. This policy literally drove the peasants to increase their consumption of their own products, resulting in a slowing in the growth of production and a crisis of supply in the cities.

Since the collective and cooperative sector of agriculture has a pitifully low productivity, it could hardly compensate for this structural weakness of the Polish economy. The weakening of the agricultural economy rapidly prepared the way for the collapse of Gierek’s program. Given the relative stagnation in agriculture, after 1976, the bureaucracy continually faced the imminent danger of a crisis of supply, and rising discontent among the workers with an accompanying decline in their willingness to work. The whole gamble on creating a “consumer consensus” was lost. The “Gierek Era” failed to prevent a ripening of the crisis of bureaucratic dictatorship. In fact, finally, after 1976 it led to an acceleration of this crisis, having been able to delay it for only four years.

However, every new attempt to “go around” the peasantry by speeding up the development of the collective-cooperative sector ran up against the political and social awakening of the peasantry, which, with a certain lag, accompanied that of the working class after 1976; and against the emergence of a spontaneous sympathy, or even alliance, between the workers and peasants against the bureaucracy. Gierek, no more than Kania or Jaruzelski have, dared come down on the peasantry the way Bierut or Rakosi did, to say nothing of Stalin. They knew all too well that they were facing the danger of a generalized social explosion. So, after 1976 the crisis of agriculture deepened, aggravating in turn the endemic crisis of the economy as a whole and finally becoming one of the main factors touching off the economic catastrophe of 1980–81. [5]

The Cumulative Effects of Bureaucratic Management

However, the ultimate cause of the Polish economic crisis lies in the nature itself of the bureaucratic system of management that has directed the nationalized economy in Poland from the start. The problem is reduced by the advocates of “market socialism,” by those who equate self-management with financial autonomy for the enterprise, by those who favor a general reliance on market mechanisms, to the evils of overcentralization. This is a false oversimplification, although the ills of overcentralization are undeniable. Such a partial and therefore incorrect analysis offers no valid solution to the problem, either from the standpoint of the interests of the workers or from that of achieving genuine rationality in the planned economy.

In fact, from the standpoint of the imbalance and crisis it generates, the bureaucratic system of management is a witch’s brew of overcentralization and overdecentralization. In the absence of socialist democracy, that is, of all-pervasive inspection from below, any overcentralization, far from “reinforcing the plan,” reinforces the growth of a “gray economy, “ the tendency for under-the-table operating by plant managements. It makes “planning” more and more unreal in the literal sense of the word. The planners lose their grip on reality and “plan” in a vacuum.

What the Polish economy needs is not less planning, that is less coordination between investment decisions, between production and consumption. It needs increasing coordination.

That is, it needs to replace half-blind, inefficient, and partially unreal planning with real coordination. But this can only be done on the basis of the workers themselves getting involved in the planning, in making the decisions, and consciously expressing choices. Only planned, coordinated and democratically centralized workers self-management can lay the foundations for a truly planned socialized economy. Anything else leads to arbitrariness, waste, incompetence, and to certain failure.

The economic experts and trade-unionist circles in Poland attach great importance to “price truth.” They stress that the present system of subsidies that cannot be kept account of makes the whole picture of the economy obscure. It is impossible to know if an enterprise is really covering production costs by its sales or to what extent. They are right. No serious planning is possible without a system of true prices and without a stable monetary standard.

However, it by no means flows from this that “true prices” are a precondition for economic recovery, that is, that before there can be economic recovery the consumers of today and tomorrow, beginning with the poorest, must pay for the damage caused by the mistakes of yesterday’s bureaucrats. Still less does it flow that the precondition for economic recovery is “rationalization of employment” (since “excess manpower” in the factories is considered one of the major sources of their “unprofitability”).

What is involved here is not a technical question (at what level should equilibrium be reestablished and the distortions eliminated, at the level of the individual enterprise, or of the individual branches of industry, or at the level of the economy and the society as a whole). It is a social question. Who is to pay for the bureaucratic waste? Is the working class to pay, through cuts in its standard of living and level of employment? Is the petty bourgeoisie to pay, by a cut in its incomes? Should the bureaucracy pay, by a drastic reduction in its emoluments and privileges? Which fund has to be cut? The one for productive consumption (that is, consumption by the workers and working farmers)? The investment fund? The one for unproductive consumption (the cost of administration, the state apparatus, the bureaucracy)?

If all three funds are to be reduced at once, in what proportion and at what social and political price? The threat of reintroducing unemployment – the figure of one to two million layoffs following the granting of “full financial autonomy to the enterprises” has been floated – is a step to weaken and demoralize the working class. It is easy to foresee what the social and the economic impact of this would be.

Bureaucratic management is harmful and aberrant not only because it undermines planning and gives rise to manifold imbalances and contradictions. It is also the fundamental cause of the low productivity of labor and the declining return for investment. While it proclaims the principle of “material incentives, “ what bureaucratic management in reality represents is universal irresponsibility raised to the level of a principle, a general incentive for making the least possible effort and taking no initiative. The very multiplicity of bureaucratic authorities, which neutralize each other and give rise to constant administrative bottlenecks in the name of carrying out decisions (although their real function is more often to keep them from being carried out) in itself produces such a situation. [6]

But here, another factor has to be put into the picture, which arises from the peculiar nature in a nationalized economy of the relationship between the social superstructure and base. In such an economy, the return on investments is determined less by their absolute size and their “technical” composition than by two external social and economic factors. One is, the increase in the well-being of the workers, the link that develops in their eyes and in their consciousness between their work and the measurable and visible effect of this work on their daily lives. [7] The other is the level of social morality (or social justice). That is, the link that develops in their eyes and in their consciousness between their work and the effect of this work on the extent of inequality and of privilege and arbitrariness in the society.

The lower these two indexes drop, or the longer they remain at a relatively lower level, the less the workers will work, the lower will be the return on investments, and the greater will be the investments needed to achieve even a marginal increase in the national income. The workers can be atomized, demoralized, and depoliticalized. But nothing and nobody can force them to work enthusiastically and reliably for a slave driver or for a bureaucratic overseer like Kania. This is the Achilles Heel of the bureaucratic dictatorship in all the bureaucratized workers states. But when the workers are no longer atomized, the seemingly all-powerful leviathan finds itself paralyzed.

From its inception the bureaucratic dictatorship has been characterized by growing social inequality and mass cynicism. While these tendencies were held in check to a certain extent under Gomulka, at least at the start of his “era” [8], they grew considerably in the “Gierek Era. “ Corruption, the black market, hypocrisy, and careerism flourished with hardly an attempt being made to conceal them. Bureaucratic privileges increased [9] substantially, notably becoming intertwined with the expansion of the “free market” and the “parallel market,” with private trade and private small-scale production, and with the increased role played by trade with the West.

Over the last two years, the Polish press has published so many concrete examples of this phenomenon that there is no need to belabor the point. The salaries of top functionaries are three times the average wage and eight times the per capita subsistence income (the respective figures are 20,000 zlotys, 6,000 to 7,000 zlotys, and 2,500 zlotys per month, and were current at the end of 1980 and the beginning of 1981). [10] But with their enormous non-monetary benefits, the special stores, special hospital and medical care, villas, and special “second homes,” their opportunities for traveling abroad and for dealing in foreign currency and goods, the real income of the high bureaucrats could easily be two or three times higher than their salaries (the jaundiced say four times). This creates a disparity in living standards of one to seven with respect to the average wage earner and one to twenty-one with respect to the minimum-wage earner. In these conditions, could anyone be surprised by the contempt, the universal hatred that the Polish workers have for the corrupt and incompetent gang that has ruled them? Should anyone be surprised by the universal contempt that exists for a “doctrine” that uses the formula of the “leading role of the party in building socialism” to paint up this scandal? A fine sort of party and a fine sort of socialism indeed!

At bay, the bureaucracy has sought excuses, pointing to managers of craft workers cooperatives, small private entrepreneurs, and rich peasants earning 100,000 zlotys a month. Aside from the fact that such cases are a great deal rarer than those of highly remunerated top bureaucrats, the reference is in itself revealing. This “Communist morality” that rejects “petty-bourgeois egalitarianism” measures the incomes of its devotees and their standard of living not against those of the workers but against those of the well-to-do petty bourgeoisie. It was not for nothing that Lenin predicted that the high salaries paid to bourgeois specialists would be a source of demoralization for the proletariat and that no party member could be permitted to collect such a salary.

As long as this climate is not eliminated, it is illusory to think that the deeper roots of the crisis have been removed. An excessive reliance on the market mechanism – a limited reliance on them is inevitable in conditions of scarcity – will increase such demoralization, corruption and cynicism, not eliminate them. Because it will increase inequality and create unemployment. And these evils do serious harm to the cohesiveness and class consciousness of the proletariat, promoting an attitude of “every man for himself, “ undermining solidarity, and obstructing all the mechanisms needed to make a socialized economy work. The generalized system of irresponsibility, hypocrisy, and cynicism, of concealing true social costs can be consolidated by a “market economy” just as it has been by overcentralized bureaucratic management.

Only the most extensive and most uncompromising workers and public inspection, having access to all the mass media, can effectively and thoroughly expose all the abuses, pillory all privileges, and uncover all the stocks that have been diverted or concealed, prevent double-jobbing and waste, and make it possible to effectively measure the effect of work on the living standards of the masses as a whole, of the entire nation. But this means socialist democracy, political power for the workers, democratically centralized self-management. It means neither the dictates of the bureaucrats nor the demands of the market but producers and citizens themselves consciously and deliberately assuming control over all economic and social life.

A Disastrous Mini-Reform

Along with the structural factors that caused the Polish crisis, it is necessary to list an immediate one – the disastrous effects of the mini-reforms, of the absence of coherent economic management since the summer of 1980. These mini-reforms were the result of a chain reaction of events over which the bureaucrats had lost control, their reluctance to set up a “new system of management,” and their desire to block the revolutionary rise of the Polish proletariat by shortages and hunger, that is, by economic sabotage.

The steps taken by the regime after the summer 1980 strikes reflect total economic incoherence. On the one hand, the incomes of the workers and the peasants were increased. On the other, the imports of raw materials, spare parts, and semi-manufactures were drastically reduced, owing to the drop in exports (especially coal) and the ensuing lack of hard currency, as well as to the reluctance of the Western creditors to grant additional loans. [11] The reduction of imports led to a fall in production. The final result was spiraling inflation, a widening gap between supply and demand, leading to a virtual breakdown of the market. The inflationary overhang is evaluated at 1,000 billion zlotys.

Speculation and hoarding developed on a large scale (semiofficial sources estimate that 30% of the meat produced was sold through the “parallel” market). And this to a large extent undermined even the possibility for a just rationing system, Since the government announced that a “real” economic reform would go into effect on January 2, 1982 with “real” increases in prices, both the private farms and the state enterprises had an interest in piling up “concealed” stocks and keeping their current production off the market in order to profit from the projected increases. (The desire to weaken Solidarnosc by keeping long lines outside the stores was certainly part of the bureaucrats’ calculations, which were not solely economic.)

Moreover, the lack of spare parts, sometimes not even very expensive ones [12] was enough in itself to produce sharp declines in production in some key sectors, such as coal mining and the electric power industry which had repercussions on the economy as a whole. The effects of this in themselves explain a large part of the grave decline in production in 1981. This occurred despite a good harvest and the presence of a greater volume of cereals, potatoes, and sugar than in 1979 and 1980.

The effect of the incoherent “mini-reforms” of 1980–81 compounded those of the structural crisis to produce the economic disaster that is now afflicting Poland. But the back ground against which this disaster – which in any case is a temporary one – has emerged, can never be lost sight of. The Poland of today is a major industrial country, certainly the tenth major industrial producer in the world. It has a developed industrial infrastructure, potentially one of the richest agricultural economies in Europe, and a working class that is far more numerous, far better educated, far more skilled than that of the prewar or immediate post-war period. These are big advantages that remain for moving toward a solution of the crisis and toward socialism, if the economy and the society are freed from the bureaucratic dross.

The Crackdown

In November 1981, after months of shilly-shallying, hesitating, negotiating, and trying to make deals, the bureaucracy suddenly indicated what sort of a general reform it intended to replace the “mini-reforms.”

While if formally maintained the “self-management” projects, they were largely voided of content, since raw materials and semimanufactures would be alloted and distributed centrally at prices set by the central authorities.

In announcing these measures, Professor Sadowski, undersecretary of state for economic reform, said that the shortages of convertible currency ruled out any other kind of reform, and that it would take “years” to arrive at “price truth”. [13]

These statements were a dash of cold water both on the trade unionists and the “liberal” technocrats. They clearly meant retention of extreme bureaucratic centralization (since democratically centralized self-management was furiously rejected by the bureaucracy as a whole).

What this reform meant for the society was made clear by the government at the beginning of January 1982. It announced a 300% to 400% increase in the prices of essential goods and services and a drastic devaluation of the zloty, along with a modest increase in basic wages and family allowances, as well as in bonuses to workers doing physically hard jobs. [14]

The objective was to wipe out the black market by raising the official prices to par with it. With this new price-wage relationship, the real wages of Polish workers would be dropped to the same level as those of the Black miners in South Africa, the equivalent in buying power of 180to180 to 180to200 per month.

The drop in the standard of living would, of course, be less. It has to be taken into account that the most working-class families earn two or more wages a month. Furthermore, during the last thirty years, working-class families have accumulated household goods on a large scale.

While one should not fall into vulgar materialism and underestimate the importance of the political challenges that the bureaucracy faced, it would be safe to say that these measures shed light on the meaning of the December 13, 1981, crackdown. [15] It is obvious that with an independent union movement and an active working class, it would have been impossible to announce such price hikes, much less implement them (they have still not been put into effect, by the way).

Clearer than ever, the dilemma remains in all its force. Either a bureaucratic dictatorship blocking the advance of Polish society toward socialism, or workers power, which will clear the way forward and solve the crisis.

* * *

Footnotes

1. According to Josef Kuzmierek (What I Knew, Krytyka, No. 3, winter 1979–80), quoted in an excellent article by Cyril Smuga in Issue No. 1 of the Polish Inprecor (the article includes a valid critique of the technocratic reform of the Polish economy prepared by the bureaucracy), these scattered initiatives led to simultaneously purchasing eleven different kinds of foreign trucks for the international transport enterprise PEKAES and various other heavy transport services. And this led to wasting foreign currency and frequent breakdowns due to the lack of spare parts.

2. While private holding of foreign currency and gold was always officially prohibited, the Polish state bank minted gold pieces and sold them privately on at least two occasions, in 1976 and in July 1980, at a price of 3,000 zlotys per 8-gram piece, that is below the market price for gold! (Kurier Polski, February 1, 1981).

3. See especially the already famous declaration of the DIP and Rakowski’s article in Polityka of July 5, 1980, and the previously cited article by Josef Kuzmierek.

4. Two examples of this depletion of reserves are that mining output was increased without the necessary maintenance being kept up in the mines; and fishing boats built with large-scale inputs of goods bought for dollars were sold for rubles inconvertible to Western currencies.

5. For the sake of objectivity, it is necessary to note the serious floods in 1978 and their effects on agricultural production. But these floods in turn were at least partly due to negligence in maintaining the dikes, which resulted from the imbalance between investment in heavy industry and investment in agriculture and in the economic infrastructure.

6. There are no less than forty different agencies devoted to “social inspection” and tracking down “economic crimes.” All together they produce derisory results. Only 5% of economic crimes committed are discovered (according to Jamita Frey’s article The Inspectors and the Inspected in Tygodnik Demokratyczny, May 11, 1980).

7. This effect is not measured so much in money income but rather in the satisfaction of real needs, both through the purchase of the desired goods and by access to quality social services – housing, laundries, and restaurants, health care, nurseries, education, cultural facilities, free time, travel, and last but not least decent public transport in the cities.

8. Thus, the “special stores” for bureaucrats were closed after Gomulka rose to power, and then reopened, notably in the form of “reserved shops” in stores, like the third floor of the Centrum, the biggest department store in Warsaw (Kurier Polski of November 21–23 and December 9, 1980).

9. One of the biggest scandals was the appearance of whole neighborhoods of luxury villas, called “Bermuda” by the masses (near Wyszkow), “The Hilton” (in the Bielsko-Biala area), the “Ponderosa” (near Wroclaw) etc.

In Przybrodzin, the settlement consisted of 71 villas, costing from 800,000 to 1.5 million zlotys per unit (the average annual wage of an industrial worker is 85,000 zlotys – Slowo Powszechne, January 17, 1981).

Jaroszewicz, who was premier under Gierek, took over a castle near Cracow for his private use, although it was officially classed as a national monument.

10. Statement by deputy minister Piotr Karpiuk to Dziennik Polski of February 16, 1981. The average monthly wage is cited by Tribuna Ludu of February 5, 1981.

11. The Western banks have agreed to discuss rescheduling of the debts falling due in 1981 and 1982, being, however, slow to move on this. But, veritable Shylocks, they have insisted on getting every cent of interest due on these debts. They have increased rates on the rescheduled loans and even seized Polish holdings abroad in order to assure payment. In this way, they have blocked imports vital for Poland, since there was no currency to pay for them. (See especially Winfried Wolf, Der lange Sommer der Solidarität, volume 2, pp. 339–342, ISP Verlag, Berlin, 1980. Also see the American magazine Fortune (September 7, 1981), the West German weekly Wirtschaftswoche, November 1981, and the Neue Zürcher Zeitung of 5–6 December 1981.

12. According to the Warsaw daily Zycie Warszawy of November 4, 1981, the production of automatic washing machines in the Predom-Polar in Wroclaw had to be stopped on November 3. The result was the loss of 1,400 machines valued at 16 million zlotys. Production had to be shut down because of a lack of pre-programming chips that were generally furnished by the Predom-Termet factory in Swiebodzice. The latter had to stop supplying these chips because of a lack of bimetallic ribbons that had to be imported – at a cost of a few thousand dollars.

13. Zycie Warszawy, November 9, 1981.

14. Le Monde, January 3–4, 1982; Christian Science Monitor, January 11, 1982.

15. See the articles, statements, and resolutions of the United Secretariat of the Fourth International published in Inprecor.

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