Poland's Return to Capitalism

 

My book 'Poland's Return to Capitalism' has recently come out in a paperback version. 

Poland's Left-Wing Voices Being Silenced

Agata Pyzik has written an interesting article for the Guardian's Comment is Free on the lack of a strong left-wing voice in public debate in Poland: 

After 1989, eastern Europe was supposed to join the club of so-called "normal countries". From now on, we were told, there would be free speech, a free press and free debate, all prevented during the years of communist oppression. But in practice, this free liberal debate is anything but.

These days, whenever someone in the post-communist countries of eastern Europe tries to criticise the changes that their country have undergone, the tendency is to ridicule, or worse, silence them. We're all middle class now, we are told. Start your own little enterprises, consume and shut up. Those trying to discuss a solution to the current crisis other than the orthodox austerity measures is quickly dismissed.

So when a group of left-leaning editors took over the troubled Polish news weekly Przekrój ("Slant") last winter, it felt like a breath of fresh air in a public sphere usually divided evenly between neoliberalists and nationalists. Yet the change of direction didn't last long. After only a few months, and with the circulation having shrunk by roughly 50%, the editors were sacked and replaced with an editorial team with a track record in entertainment and lifestyle journalism.

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Refugees in Poland on Hunger Strike

Over seventy people continue a hunger strike in polish detention centers.

Below is a statement from the website supporting the strikers

Facebook group here

Part of the detainees claim they lack competent legal support or interpreting services, which seriously obstructs the process of claiming their rights in court. Others point to the fact of children not having their rights respected in the centres, of lack of proper education and healthcare, and they demand improvement in social conditions. Detainees indicate the problem of being isolated from the outside world, which provokes abuse on the side of the Polish border guard officers: mental and physical violence, sexual harassment against women, punishing and harassing without respect to the regulations. However, the worriment predominantly indicated by all is the experience of being second-class persons, marginalized by immigration regulations, totally excluded, bereft of even those rights, which they are supposed to enjoy because of being human.

In accordance with the non-refoulement principle, found in Geneva Conventions as well as in Polish Immigration and Immigrant Protection Acts (June 13th 2003), there is also a “category” of persons requesting a refugee status, which means people who seek asylum in Europe. In short, this implies that EU member states are obliged to consider those people’s requests. Therefore, regulations were introduced to legally allow such cases to end with a refusal.

An example of such is Dublin II, an ordinance declaring that asylum requests should be filed in the member state, in which the foreigner crossed the limits of the Schengen Zone. If someone seeks asylum in a different country, they are usually refused and deported to the primary country of arrival. There they seek asylum again, but they have to await the decision in a detention centre, which takes up to a year. In Poland, around 1.6% of claims from asylum seekers are successful, while around 18% receive only so called subsidiary protection for a period of two years. In effect, thus constructed regulations ensure nothing but an illusion of a right to asylum, and in many cases embody an abuse of non-refoulement.

Due to the lack of clarity of regulations, in case of the majority of persons rejected back to Poland on the basis of the Dublin ordinances, the court almost automatically requests to detain them in one of the immigrant detention centres. Notably, detention is designed to serve an ultimate measure, used only in cases of most serious breach against law and order. Immigrants did not commit a crime, nor do they threat the security of the state or its citizens; therefore there is no premise for bereaving immigrants of their freedom, to which they have an undeniable right as human beings. In no aspect do detention centres differ from prisons (barred windows, barbed wires, tall walls, limited access to therapies or education) and in some cases they are organized under harsher conditions than prison regime. Innocent people are detained in the centres, made to play the role of criminals serving punishment.

Strategy of dividing migrants between the wanted and the unwanted, based on economic and political demands of member states, allow to categorize human beings according to the current political and economic situation in a given country. Yet, the “luck” of finding oneself among the “wanted” immigrants does not equal legalization of residence. Illegal immigrants receive wages lower than minimum. Employers do not pay their employees’ insurance, and the lack of chance to claim workers’ rights compensates them any risks they might experience because of illegal employment.

EU’s official policy points to fighting “illegal migration”. Decisions categorizing persons between statuses are taken on artificial criteria, precariously changed to serve the current needs of the market. Morally, this is a totally objectifying way of treating people, who took a desperate step of fleeing their homes, abandoning everything they cared for, and seek security someplace else, because of war, harassment, catastrophes or a tragic economic situation. In their situation, the possibility of legal arrival in Europe is almost none. Therefore, the number of legal immigrants remain scarce, while the rest receive the status of illegals.

The outrageous abuse against immigrants in Europe, both free and detained, is only a secondary problem. The real cause of their personal grieves is the systemic segregation and dehumanization, legally referred to as EU’s migration policy.

Are We Really All Keynesians Now?

Compare the following two statements made by PM Donald Tusk to the Polish parliament over the past year:

November, 2011: 'I do not hide the fact that the aim is to stabilise the financial situation of Poland. This is positive for the reputation of Poland and connected to the security of our bonds.'  

October 2012: “The world and Poland face another difficult year. The primary goal before the government is to protect people from the consequences of the crisis.”     

The change in emphasis, less than a year into the second term of the PO government,  is striking. It reflects a move from prioritising reducing public debt, through cutting government spending, towards increasing public investment in order to instigate economic growth. Considering that PO is considered to be the country’s main liberal economic party, is it possible to claim in Poland that we are all Keyensians now?

The phrase We are all Keynesians now dates back to the 1960s when the basic premises of Keyensianism were accepted in North America and Western Europe. Of course much has changed since then. The post war consensus was dismantled and following the end of the Cold War a new neo liberal hegemony took hold that dominated economic thought on the left as well as the right. 

Despite living though the greatest economic crisis since the 1930s, the ideologues of liberal economics have continued their offensive. Whilst the banks and financial sector received huge state bailouts, governments have been expected to cut their spending on public services and social benefits , further deregulate labour markets and push down wages. The policies of austerity are designed to shift the burden of the crisis onto those that did the least to cause it and have deepened the economic downturn, causing further social disorder and political instability. 

The balance sheet of the past few years is that the economic crisis has been most pronounced in those countries where the policies of austerity have been most severe. This stark reality has even led to the director of the IMF, Christine Lagarde, suggesting in recent days that governments should consider slowing the pace of their austerity programmes, due to continuing suppressed economic growth.

It is in this context that Tusk, gave a major speech to parliament last week during a self-induced vote of no confidence. Following the end of the major investment programme in the run up to Euro2012, the Polish economy has entered a downturn. This has been driven by a collapse in the rate of investment, that fell from nearly 10% in the 1^st quarter of 2011 to under 2% in the 2^nd quarter of 2012. As a result economic growth has slowed, unemployment risen and real wages dropped. In turn the PO government is trailing in the opinion polls for the first time since it came to power in 2007,  only 28% of Poles say that they now supportthe government and there has been an upturn in street protests organized both by the opposition and trade unions. 

After winning a second term in office last year it seemed that Tusk and his party were both returning to their ideological liberal roots and coming into line with the accepted economic orthodoxy of austerity. However, Tusk’s recent speech to parliament has shown that there is now a change in emphasis and that the government is considering increasing its own investment in order to stave of an economic recession. 

Tusk announced large public spending on areas such as highways, rail modernisation,the  army, power plants, a natural gas terminal and new pipelines. He announced that over the next few years Poland would spend around 220bn zlotys ($70bn), although some of this was recommitting the government to previous spending plans. 

The major part of the funding for this investment programme will come out of funds from the next EU budget, that comes into force from 2014. The government is estimating that this will add up to 300bn złoty (although this of course has not yet been negotiated), with the rest of the money gained from financial institutions, the state budget and private and state companies.

Importantly the government has announced that it will bridge the gap before these funds from the EU begin to arriv,e by increasing public investment from the beginning of next year. It plans to use the state-owned BGK bank to set up a 40bn zloty investment fund, which will be supported by the largest state controlled companies. This will be used in order to encourage private sector lending for big infrastructural projects and it is hoped that over the next six years it can be leveraged up to  90bn zloty. 

Of course the usual suspects on the sidelines have criticized the government for breaking with liberal economic orthodoxy. However, these are now isolated voices on the sidelines, with the political majority recognising that only further state investment can prevent a serious economic downturn. 

The change in economic strategy, announced by the Tusk government, of increasing government investment is to be welcomed. However, the details of the government’s plans are as yet unclear and the exact sources of finance uncertain, particularly as they rely upon encouraging private investment. The major test will quite simply be whether they result in an increase in the rate of investment in the country or not.

 A further point is whether the investments will be of a type that will be in the best interests of the Polish economy and society. The announcement that a large proportion of the money will be spent on modernising the army indicates that this may not necessarily be the case. Importantly, the government has not presented a programme of public investment tied to solving the country’s major social problems.

In particular this concerns increasing the very low rate of employment in the country. Keynes, as well as his Polish predecessor Kalecki, placed the question of full employment at the centre of his general economic theory,  writing in his  magnum opus (The General Theory of Employment, Interest and Money) that : ' The central controls necessary to ensure full employment will, of course, involve a large extension of the traditional functions of government.’

Yet, despite the inflow of EU funds over the past few years, alongside the large outflow of young workers from the country, unemployment still remains around 13% in Poland and only slightly 50% of the workforce are active on the labour market. Almost every social and economic problem in Poland (from negative demographic trends to underfunded public services) can be attributed to the extremely low level of labour activation. However, the government has failed to present any coherent plan to improve this situation. Nor has it linked its programme of public investment to improving the drastic situation in the health service, nor improving the worsening housing situation though instigating a programme of house building. 

The change in government policy should be welcomed and seen as a positive reaction to the country’s growing economic difficulties. However, this will ultimately be judged according to both by the size of investment programme and also by whether it results in an improvement of the living standards and quality of life of the country’s citizens.