Wednesday, 25 August 2010

Slump in Private Investment in Poland

The Polish government has never missed an opportunity to point out how Poland has been the only EU country to avoid an economic contraction throughout the global economic crisis. And this is certainly something worth highlighting. For although economic growth has significantly slowed and unemployment grown over the past couple of years, the maintenance of positive economic growth in Poland has allowed millions of people to avoid further economic hardship.

The reasons for Poland's relatively positive economic performance and its ability to keep out of recession have been less comprehensively considered. The present government is keen to take the credit for this – but then it has actually done.. well not too much since it got elected. More generally 'economic experts' in the country have tended to argue that the country's economy is more competitive than many of its West European rivals, due to the extensive liberal reforms that the country has undergone during the past twenty years. Unsurprisingly their recipe for further economic success is therefore more liberalisation, privatisation and cuts in social spending.

Yet this story of 'creative destruction' does not concur with actual economic reality and has more to do with ideology and narrow economic interest. The present global economic crisis has been primarily caused by a collapse in fixed investment. Therefore:

'Decline in fixed investment accounts for approximately 96% of the fall in GDP in the OECD area as a whole and for 76% of the decline of GDP in Europe. In three countries - the US, Spain, and Portugal - the decline in fixed investment was greater than the decline in GDP. In Japan, France and Greece the proportion of the fall in GDP due to the decline in fixed investment was over 70%, 80% and 90% respectively. In every country except Germany the fall in fixed investment was the single biggest component of the decline in GDP. In short the decline in fixed investment entirely dominates the Great Recession'

Just as we can understand how the collapse in fixed investment has led the economic crisis so we can also see how those countries that have managed to maintain or increase fixed investment have been least affected by the crisis. This is most evident in China, whose government reacted to the onset of the financial crisis with a large increase in fixed investment.

So what about Poland? Well we would expect that for Poland to have avoided falling into recession then there must have been an increase in investment. However, figures recently released by the national statistics agency have shown that private investment has fallen sharply in recent years. Furthermore this fall in investment has been greatest this year. Therefore in June 2010 the overall year-to-year fall in private investment was 17.7% - declining for example by 20.8% in construction and 15.6% in buying machines, tools and vehicles. However, this fall in investment has been offset by public investment. The money to finance this has come primarily from the EU (through cohesion funds), supplemented by funds from the Polish government.

In the 2007-13 EU budget, Poland has been allocated up to €67bn in structural and cohesion funds. It has become the largest single receiver of EU funds – gaining, by February 2010, a net sum of around €21.4bn. Furthermore, over 1.4 million Polish farmers have obtained agricultural subsidies adding up to €5.3bn (in 2009 the total figure was €2.98bn, which is expected to rise to more than €3bn in 2010.) The Polish government estimates that around half of the country's growth in 2009 was created by investments, jointly financed by the EU. A total sum of 18bn zloty was spent on building roads, bridges and sewage works alone in 2009, which is expected to rise to around 25bn zloty this year.

Therefore, public investment has managed to counterbalance the decline in private investment in Poland. There are a number of conclusions to be drawn from this:

1. It is essential that the government commits as large amount of its own funds as possible in order to gain the optimum amount of EU money available for investment from the EU budget until 2013.

2. This should be seen as an investment in the country's economy that will bring future rewards. The committing of such government money should not be used as an excuse to cut back on public spending in other areas which is also contributing to the country's economic growth and social welfare.

3. The neo-liberal mantra of 'private good – public bad' – continually espoused in Poland has been shown to be false during the present crisis. If it were not for the present influx of EU funds (which ultimately is public money at an EU level) supplemented by national government money, then Poland would have suffered a far greater economic downturn. It should also be understood that this is a form of economic redistribution towards the poorer areas in the EU – which is something that liberal politicians have consistently opposed in Poland at a national level.

4. The forthcoming negotiations around the next EU budget, to come into force in 2014, will be of the utmost importance. Already some inside the EU are using the crisis as a reason to argue for the abolishment or reduction of cohesion funds. The richer countries inside the EU have made huge profits out of EU enlargement – e.g through export of goods, monopolisation of financial and consumer sectors and import of cheap labour. If the EU were to decrease or even eliminate the cohesion funds then it would be damaging not only for countries such as Poland but would also threaten the whole process of European convergence.

Friday, 20 August 2010


In my previous post I considered the question of religion and the left in Poland. I argued that secular liberalism had shrunk to a minority political current due to its close association with the neo-liberal economic reforms of the transition. I also postulate that the left has sometimes fallen back upon anti-clericalism as a way of compensating for its lack of a left programme on socio-economic issues. This has meant that it has become isolated from large social groups who have become politically 'represented' by the conservative right. In the article below I look at how sections of the left internationally have justified their support for the US led wars in the Middle East and Islamophobia in Europe through formally deploying the language of secularism and atheism. This is an example of how the progressive ideas of the Enlightenment can be falsely used in order to justify inequalities and injustices. The left in Poland should consider how to advance the progressive ideals of secularism, while not isolating themselves from the vast majority of society who continue to associate themselves with Catholicism.

(This article is partly based on a version that appeared in Polish in the journal Bez Dogmatu in the Summer 2008)

The American led invasion of Iraq in 2003 was met with the largest international coordinated demonstrations in history. The vast majority of the international left united with millions around the globe to express their opposition to the latest in a series of unilateral aggressive military actions instigated since the end of the Cold-War. However, as millions of people, in over 800 cities around the world, demonstrated against the invasion, a section of the intellectual liberal-left, predominantly in the Anglo-Saxon world, were marching in the opposite direction. Broadly known as the ''pro-war left'' a group of intellectuals and academics articulated a liberal-left justification for supporting the second Gulf War.

Two books, by the authors Nick Cohen and Christopher Hitchens, divulge the thinking of the pro-war left. Cohen argues that in the post-Cold War age the left has lost its principles. He writes that although the left never accepted that communism was as bad as fascism, it had always stood firm against the latter. However, Cohen continues, in recent years this has changed, as the left has begun to excuse 'fascism', in a manner reminiscent of how the right had done previously. The collapse of 'socialism' in Eastern Europe disorientated the left, with the idea that history progresses towards a higher and more equal social order disappearing along with the bi-polar international order. In such circumstances, argues Cohen, the left started to embrace a form of extreme liberalism, relativism and nihilism, supporting anyone who opposed to the 'international hegemon', i.e. the USA. In such conditions the left has fled from giving its support to the principle of universal values and has sought an alliance with forces of the 'ancien régime' against the ideals and practices of the Enlightenment. Cohen, along with other representatives of the 'pro-war left', specifically writes about the relationship between the left and Islam. For Cohen there is an historical continuation that runs from the counter Enlightenment, through to fascism and then metamorphoses into twenty-first century Islamism. He says that the left first opposed the overthrow of Sadam Hussein and his government (described as being fascist) and then refused to support the occupation of Iraq, thereby giving its de-facto support to Islamic fascism. This accommodation by the western left to Islamism is, contends Cohen, similar in essence to the actions of that part of the left that supported appeasement with Hitler before World War Two or gave support to the Nazi-Soviet Pact in 1933.

Cohen raises a broader philosophical point by claiming that the left has forgotten a fundamental lesson of the Enlightenment: i.e. that all religious faith carries the possibility of tyranny, as God is placed above differences of opinion, electorates, tolerance, etc. It is this theme that is taken up by the American based British journalist Chirtopher Hitchens. Hitchens has made his name through writing diatribes against the 'multi-culturalist' left and tracing the well-trodden path from avowed Trotskyism to neoconservatism. Hitchens' intellectual contribution to the debate over religion goes no further than Nietszche's famous maxim that 'God is Dead' and his view that belief in a single ultimate judgemental authority represents an escape from worldly realities. In Hitchens' book 'God is not Great' (which inverts the Islamic dictum 'God is Great': Allahu Akbar) he argues that religion derives from a time of human pre-history and that its doctrine of blind faith has been superseded by the scientific discoveries of the Enlightenment. Despite it banality, such thinking seems to lie within the boundaries of basic liberal-left thinking. However, such rationalising has provided the intellectual cover for Hitchens to not only support the occupation of Iraq but to take political positions that place him in the camp of extreme neoconservatism. For example, Hitchens described conditions in the notorious Abu Ghraib prison as having improved markedly since the US-led invasion of Iraq and defended the USA's claims that Iraq had possessed weapons of mass destruction. Some of the depths that the 'pro-war left' has sunk to is most shockingly shown in Martin Amis's arguments on how the Muslim communities should be policed in Britain: 'The Muslim community will have to suffer until it gets its house in order. What sort of suffering? Not letting them travel. Deportation - further down the road. Curtailing of freedoms. Strip-searching people who look like they're from the Middle East or from Pakistan ... Discriminatory stuff, until it hurts the whole community and they start getting tough with their children..." In these lines we can read how the views of a section of the liberal-left have transmuted entirely into a political viewpoint that belongs securely in the camp of the extreme conservative right. (

What we are dealing with is the use of liberal, secular ideals, obtained from the Enlightenment, as a means to explain and justify the actions of the USA and its allies in the Middle East and the systematic coercion of the Muslim communities in the West. The demonisation of Islam and de-humanisation of Muslims, in the name of liberal democracy, is a means of gaining social acceptance for the suffering inflicted by the wars in Afghanistan, Iraq and possibly beyond. The use of atheism and rationalism as a philosophical covering for oppression and war is not new. Enlightenment philosophy was the product of a rising bourgeoisie, rallying against the mystic philosophies of the ancien régime that sought the restoration of feudal absolutism. However, on the eve of the imperialist age, philosophy moved away from concentrating its attacks on feudalism to advancing a critique of the alternative of socialism (as well as the realities of liberal democracy.) Famously, Friedrich Nietzsche developed a philosophical outlook that regressed back beyond the Christian idea of the 'equality of souls' to the Greek belief in an elite and the view that civilisation would perish without slavery. Therefore, for Nietzsche, injustice lies not in the realm of unequal rights but in the claim to equal rights. A new 'class state' needs to be created that would establish the rule of 'masters' over 'slaves', against both popular representation and socialism. Nietzsche mythisised this theoretical state, through his concepts of the 'superhuman' and 'lords of the Earth', and his advocation of nihilism and decadence.

Nietzsche's atheism was built upon a similar mix of myth and reaction. During the late nineteenth century a large section of the intelligentsia was drawn away from religion due to developments in the natural sciences, not least the discoveries of Darwin. Nietzsche transformed atheism into a myth that rejected the 'slave mentality' of Christianity and 'liberated' humans from moral constraint. In place of religious belief Nietzsche devised the theory of 'eternal recurrence', a theory with no scientific grounding, that stated that the emergence of something new is a cosmic impossibility and that a first principle of philosophy is that of the 'rotating' cycle. The purpose of this philosophical reasoning was to counter the idea of becoming with that of being and to show how the existent order was a natural and permanent one. Nietzsche condemned both Christianity and socialism for containing ideas of transcendence, replacing this with the notion of immanence, which essentially equalled the everlastingness of capitalism. Nietzsche's philosophical outlook embraced pessimism, nihilism, inequality and an amoral society. Nietzsche became the philosophical vocal point for a range of conservative thinkers of the twentieth century, including the ideologues of National Socialism, who distorted the Enlightenment thinking by becoming apologists for capitalism's worst side and eulogising the values of decadent individualism, egotism, barbarism and domination.

Nietzsche urged the construction of a 'New Enlightenment' that would differ from its original version through rejecting the spirit of the 'democratic herd' and the ideal of a universal levelling. Neitzsche's New Enlightenment would be built upon an acceptance of the inequality and domination within nature and the nihilist morality that 'everything goes'. This idea of a New Enlightenment has been replicated in the writings of the 'pro-war' left, who advocate a 'Second Enlightenment'. The declared aim of a 'Second Enlightenment' would be to bring progress and liberation to the peoples of the Muslim world. However, talk in the West of a 'Second Enlightenment' is nothing more than an ideological obscurity for the continuation of the succession of wars unleashed over the past two decades. It is hard to imagine that anyone could seriously conceive, for example, that a war against Iran would advance the cause of progressive social and political change in the country. One of the most commonly used arguments of the 'pro-war left' has been that the majority of the international left has moved away from supporting the universal values of liberalism and secularism. Therefore, the argument goes, the international left, by opposing the military activities of the USA, has adopted the mantra of an 'enemy's enemy is my friend', thus siding with extreme conservative political movements and regimes. Such reasoning originates in neoconservatism, whose roots are found in those intellectual circles that combined extreme anti-communism with an idealistic belief in universal rights and social progress. The 'pro-war left' and the neo-conservatives are at one in believing that historical progress and liberation can be brought about through military interventionism. However, although neoconservatism is purportedly founded upon the principles of secularism and the Enlightenment it gained power through allying with the apocalyptic religion of the American Christian fundamental right. It was this curious mix of secular Enlightenment thought and religious fundamentalism that underpinned the Bush administration in the USA. Also, Tony Blair frequently evoked religious language to justify Britain's activity in Iraq, even claiming that 'God will judge whether he was right to send British troops to Iraq'.

The ideals of atheism and secularism are now being used by some to justify a process of historical regression, that includes subjugating large sections of the world's population to a new form of imperial rule. Religious belief is no longer a secure guide for determining left/right political alignment. For example, the left turn in Latin America has been marked by many of its leaders (most notably Hugo Chavez in Venezuela) declaring their Christian beliefs. In Europe liberal secular ideals have been used to justify a series of anti-Islamic laws and propaganda alongside a range of anti-immigrant and Islamophobic sentiments and policies. Behind this lies the use of secular rationalism as an ideological cover for the wars in the Middle East. The language and ideals of scientific rationalism and secularism had originally developed in a context of social progression and inclusion. It is now being deployed, in some quarters, for the opposite purpose, with the banners of atheism and secularism raised as ideological crucifixes for the conflicts and wars of the twenty-first century. This surge in 'religious atheism' thus reduces materialist thought to a dogmatic schemata. It is worth recalling Karl Marx's quip that those brandishing the title of atheism 'remind one of children, assuring everyone who is ready to listen to them that they are not afraid of the bogy man'. The historical lesson that should be recalled is that religion is a product of earth and not heaven and that it is only through improving humanity's condition that materialist thinking will gain an ascendancy. The social desolation and rising global inequalities, wrought from the policies of neo-liberal economics, have eroded the conditions for the growth in materialist thinking and have thus been replaced by the invectives of the 'fundamental atheists', who use some of the terminology of progressive Enlightenment thought to justify their own abandonment of humanist internationalist politics.


N.Cohen , What’s Left? (UK, 4th Estate2007)

T.Eagleton, ‘Rebuking obnoxious views is not just a personality kink’ The Guardian (10.10.2007)

G, Hitchens, God is Not Great. How Religion Poisons Everything, (USA, Twelve Books, 2007)

G Lukac ‘Nietzsche as Founder of Irrationalism in the Imperialist Period’ (
J.Gray, Black Mass: Apocalyptic Religion and the Death of Utopia, (2007, UK, Penguin)


The dispute surrounding the cross outside the Presidential Palace raises a broader question as to what the attitude of the left should be towards religion and the Church. As a movement born out of the Enlightenment and the ideas of modernity and progress the left has tended to be related to secularism and often atheism. The left has frequently come into conflict with religious establishments and it should be remembered that the full separation of the Church and State had already been achieved in Poland over 60 years ago after the establishment of a 'Communist' system. Nevertheless the actual relationship of the left to the Church and religion has not always been a clear cut one.

During state-socialism the Catholic Church enjoyed huge prestige and influence within society, especially after the appointment of a Polish Pope in the early 1980s. The Church came to be seen as an institution around which the opposition could unite and an independent space where people could congregate. This forced some of the secular and liberal members of the opposition to re-consider their attitudes towards the Church. This was famously formulated by Adam Michnik, who argued that the secular opposition should reassess its reflexive anticlericalism and recognise the Church as an institution that challenges the state's control of spiritual life in society and advocates human rights and liberties. Michnik argued that the Catholic Church was the only institution in Poland that was both legal and independent of the power structure and fully accepted by the people. (Michnik, Adam (1993) The Church and the Left U of Chicago P , Chicago)

This pragmatic change in emphasis by sections of the opposition coincided with a wider change of political ideology. Moving away from supporting the further democratisation and socialisation of socialism, the intelligentsia, in the final years of state-socialism, counterposed the political system and its ruling ideology with the liberal concepts of pluralism and imperfection. Michnik propagated the slogan that "grey is beautiful", which implied that in a democratic system there are no fixed concepts of "right" and "wrong" and no illusions harbored of the "utopia of a perfect society." Such thinking laid the way towards the intelligentsia's full political conversion to liberalism – both in the spheres of politics and the economy. This included wholesale support for the 'shock-therapy' economic reforms, introduced at the beginning of 1990.

While anti-politics led to neo-liberalism, the actual political sphere was formally reduced to an arena for the "conciliation" of interests, with the state maintaining a seemingly relativist stance of neutrality on issues of ideology and morality. In contrast, the Polish Catholic Church was not interested in gestures of neutrality and filled this political void, only meeting some partial resistance during the first SLD government in the mid-1990s. The social effects of the shock-therapy reforms quickly led to their political dissipation and isolation; and the later decline of the 'post-communist' left ensured that conservatism grew as the most coherent political current in Polish politics.

Right-wing conservatism in Poland fed upon the discontent of large sections of society with the economic transition and widened into a general attack on the liberal democratic system. Prominent conservative thinkers in Poland have stated that liberalism adheres to a linear model of modernisation, which is similar in essence to the Marxist notion of development. They further assert that the liberal path of development produces a democratic system that lacks a moral base. It both alienates the nation's traditional culture and excludes a real critique of communism. Polish conservatives have claimed that the separation of the Church and State excludes believers from political debate, pushing them into conflict with the liberal secular state. In response, the conservatives promote the creation of a new political hegemony in Poland based around a conservative moral framework, with the state and Church acting as its custodian against the liberal-left. (Prominent conservative intellectuals in Poland include figures such as Dariusz Gawin, Zdisław Krasnodębski and Marek Cichocki, who are brought together in the Kraków based Centre for Political Thought)

It was such thinking that intellectually underpinned the actions of the Law and Justice Party (PiS) and its government from 2005-2007. The policies of this government combined a programme of 'de-communisation' (verging on McCarthyism), anti-liberalism and creeping authoritarianism. The PiS government also brought the Catholic Church closer into the political arena and closed the gap between the Church and the state. It openly stated that it was an administration for "believers" and that one of its aims is to ensure that Catholic institutions are not 'discriminated' against. The government argued that the Church is the one institution that projects a universal system of values and raised the possibility of a form of "moral censorship" being created, meaning that certain views should be excluded from the public discourse. (Gazeta Wyborcza 7-8 Jan. 2006, 20 July 2006.) The present PO government has moved away from this more extreme version of conservatism. Nevertheless it has not challenged the influence of the Church in public life nor the conservative political framework that it supports.

In such circumstances the left has often found itself at the brunt of the attacks by the conservative right and is also virtually the sole remaining political force that coherently supports a fully secular and liberal state in Poland. I would argue however that there is a danger of over-emphasising the question of religion and the Church and making it almost the sole defining issue of the left. This has been particularly exaggerated due to the left's inability to present a coherent economic alternative to neo-liberalism (whether in its liberal or conservative political guise). There has been a tendency for sections of the left to seek an alliance with liberalism in Poland, and to compromise on socio-economic issues. It could be argued that this would be a worthwhile temporary alliance if it would help introduce real secular and liberal reform in Poland. However, secular political liberalism in Poland has virtually disappeared as an independent political force (mainly due to its association with the shock-therapy reforms and neo-liberal economics) and only exists as a minority element within the ruling Citizens' Platform (PO). Those within the left seeking to form an alliance with PO should be aware that this would further isolate the left from its natural electoral constituency and potentially further push large sections of Polish society closer to religious conservatism or political apathy. There is also no use opposing clericalism and conservatism through claims of rationality or demeening people's faith. Rather the interference of the Church in political and public life should be consistently challenged while opposing the social inequalities that have fuelled the rise of right-wing conservatism in the country.

My next blog post will consider how the relationship between religion and the left has changed internationally in recent years.

Monday, 16 August 2010

Cross Purposes

Two social groups face each other. They find no mutual recognition, no common language, no room for compromise or discussion – they are in total opposition. Their language, ideas, morals and lifestyles revolt the other whom they sneer at, mock and degrade. They blame their adversaries for their own frustrations, limitations and fears.

Anyone who has visited the Presidential Palace in Warsaw during the past couple of weeks will have witnessed such a scene.In front stands a group of protesters who oppose the removal of the cross raised by Scouts after the Smoleńsk tragedy in April (for more details on this in English see here and here.) They see this as an affront to the Polish nation and Catholicism. Many of them believe that the Smoleńsk tragedy was a deliberate attack organised by Russia in cohort with sections of the Polish elite. Their ideas are drawn from Poland's long and often tragic history of war, occupation and partition. Yet they also feed upon the social alienation and exclusion of large sections of society in contemporary Poland and the inequalities and injustices that it has spawned. Despite their small numbers these protestors have so far prevented a weak and indecisive establishment from removing the cross.

In opposition another group of protestors has emerged. This is mainly drawn from the young, urban milieu. They do not derive their identity from the past and do not want their country to be defined by historical conflict and the overbearing dominance of the Catholic Church. They are culturally open, forward looking and hope for Poland to take its place at the centre of Europe with a developed economy and modern society. Counter-demonstrations have been organised and some are claiming that a new social movement is being born, seeking to push Poland forward towards a full separation of the Church from the State, removing crosses from all schools and public buildings and supporting reforms such as the state funding of in-vitro treatment.

This cultural conflict is being driven by immediate political concerns. After presenting themselves as the party of reason and moderation during the Presidential elections, the Law and Justice Party (PiS), and its leader Jarosław Kaczyński, have returned to form. Kaczyński is determined to establish the martyrdom of his brother Lech Kaczyński and create a symbol around which the Conservative-Nationalist right can unite. This involves opposing the Russian led investigation into the Smoleńsk tragedy and trying to create a new historical myth of external aggression and internal betrayal.

The problem facing PiS is that this is not a strategy for political success. It may appeal to the party's core conservative base but it all but removes the possibility of PiS challenging Citizen Platform's (PO) current monopoly of political power. Already the hierarchy of the Catholic Church have distanced itself from the protests, seeing them spiral out of its control and fearing that they may unleash a new social movement for secularism in the country. The success of PiS in previous elections was rooted in its ability to unite a number of ideological currents through claiming to represent the interests of the poorer sections of society and putting forward a programme of cleansing a corrupt political system that was supposed to underlie these injustices. The present political trajectory of Kaczyński is already causing some disconcertion amongst the party's ranks as it threatens further political isolation.

And what about PO? On the one hand, the current conflict is another political gift from the opposition. It diverts attention from the government's own potential problems – not least the emerging budget crisis – and increases the likelihood of many returning to support PO simply because it is not PiS. PO most closely represents the wishes of the economic elite at this juncture and better represents the sort of society needed for a functioning contemporary capitalist economy. PO is also moving closer to the hierarchy of the Catholic Church as the latter comes to realize that it may be better to accept the status quo than risk its own already privileged position. The problem facing PO is that many of its young urban electorate may want to go beyond this brand of 'moderate' conservatism. If PO were to take up many of their demands, such as removing crosses from schools, then it could unleash divisions between its conservative and liberal wings and threaten its own internal unity.

The one party that expresses a clear secular and culturally liberal position in Polish politics is the Democratic Left Alliance (SLD). The SLD's leader Grzegorz Napieralski has wasted no time in expressing his support for further secular reform in Poland. It is feasible that the SLD could gain the support of many who have been galvanized by current events. The SLD has largely built its identity through opposition to the clericalisation of Polish society and politics. While the Polish left has generally failed to coherently oppose the neo-liberal reforms of the transition from state-socialism, it has at least managed to express its opposition to the growing influence of the Catholic Church in public life (although it made large compromises when in government.)

The danger for the left is that it overplays this card. It is right for Napieralski to express his support for Poland's cultural and social policies coming more into line with the European mainstream and for a full separation of the Church and State. However, the left has to find a way of uniting different social sectors, often with conflicting social outlooks. Polish society is not neatly divided into two camps of 'liberals and conservatives' or 'progressives and reactionaries'. There are millions of people in Polish society who would not agree with the extreme views of the protestors outside the Presidential Palace yet at the same time would not identify themselves with the counterdemonstrators. For the vast majority of primary importance is not, for example, whether a cross hangs in a school but whether that school provides their child with a decent education or not. Bringing such needs together is the key to creating a real progressive majority in Poland.