Saturday, 28 May 2011

Strikers Hold Back Economic Growth

A small yet powerful group is holding society to ransom. Its continuing strike is damaging the economy as it puts its own interests before those of society and the nation at large.

Sound familiar? Well this does not refer to the trade unionists who took to the streets this week in Poland and were met with widespread criticism in the press. Here I refer to the ongoing 'investment stike' being pursued by private businesses in the country.

In the first quarter of 2011 the combined income of companies in Poland grew by 12% from the comparative period last year. Although costs also increased by 11.6%, profits went up on average by 4.3%, with 61.3% of all firms enjoying growth throughout the year.

Despite these positive results, Polish businesses are still refusing to invest these profits in the wider economy. In the words of an expert from the Polish business association Lewiatan: 'companies are accumulating money instead of investing it.' Therefore although large businesses in Poland enjoy a number of privilleges - paying a low flat-rate of national insurance and business tax - the economy and society at large are not seeing a benefit of their high profit rates.

Yet media and political scorn has been reserved for the trade unionists and not for these 'investment strikers'. This week the Solidarity trade union federation (supported by the OPZZ) organised a series of regional demonstrations of workers employed in state industries. Their slogan was 'Your Politics, Our Poverty' and their demands included raising the minimum wage to half of the average wave; reducing tax on petrol, halting the planned wave of privatisations and raising the salaries of state sector workers.

As an example of the criticism faced by the trade unions we can consider the two simultaeous opinion pieces published in Thursday's Dziennik Gazeta Prawna (DGP) newspaper. These commentaries combined a number of criticisms made against the trade unions.

Firstly Joanna Soldska argues that those working for the state and public sector earn relatively well in Poland. She describes how workers in the private sector are often under more direct economic pressure to compete in the global economy and that their wages and work conditions are severely repressed. She is obviously right to point out how the lowest salaries and worst working conditions are found in the private sector - although many public sector salaries remain very low - however she of course does not refer to the extremely high salaries that some private sector workers earn in Poland. Her supplementing argument is that the profits of state firms belong to us all (sic) and not to the trade unions. The only logical conclusion of Ms Soldksa's line of thought, is that in the name of fairness the salaries and working conditions of state workers should be lowered to those of the most exploited private sector workers.

The accompanying article - written by Paweł Rożyński - accuses the trade unionists of being overly 'politicised'. He expresses horror that the trade unions are in some way connected to political parties and dare to express an opinion on matters such as what should or should not be privatised. However, research has consistently shown that participation in civic and political life in Poland is at an extremely low level. In sociological jargon civil society is considered to be poorly developed and social capital weak. One would have thought, therefore, that when employees decide to voluntarily join a trade union, participate in its activities and put forward their own politicial ideas and demands that this would be welcomed. The fact that this needs to be pointed out in a country where the Solidarity movement arose is a great shame. Furthermore there is nothing unusual in a trade union playing a strong role in politics. Throughout Europe this is the case - with trade unions exerting a political influence on parties as diverse as the British Labour Party or German CDU. We may question the choice of the trade unions' political allies - particularly Solidarity's close connection to PiS - but not their right to make such alliances.

The majority of the rest of Mr Rożyński's text refers to the damage he perceives that the trade unionists' demands would cause. Raising the minimum wage would of course put up the costs for businesses who then would not erm.. invest in the economy. Also increasing the salaries of state sector workers would be unfair as it would further raise the privileges of this group of workers. Of course no mention is made of the high profits currently enjoyed by state industries nor the extremely high salary rises that the management of some of these companies have received (see here).

The one criticism I can partly agree with concerns the trade unions' call for the government to reduce tax on petrol. The problem with this is that it scratches the surface of the more fundamental problem of constructing a fair and efficient tax system in Poland. The basis of such a tax system should be one that is progressive and encourages investment. This would mean introducing a progressive tax for businesses (both on income and national insurance). It is a ludicrous situatation that millions of people who are often forced to become self-employed are paying a similar rate of tax as the largest corporations. This could be combined with tax incentives for those companies that invest in the economy and create new jobs. Secondly, the trade unions should demand reversing the regressive tax reforms introduced by the previous PiS government, and bringing in a more progressive income tax system in its place. These measures could be implemented whilst simultaneously reversing the increases of VAT introduced recently and help to protect low and medium wage earners.

The Polish economy has kept growing despite (and not because of) a fall in private business investment. The twin engines of this growth have been domestic demand and public investment. It is not the trade unionists who are threatening this growth, but those companies who are continuing to horde their profits and enjoying preferential tax rates; whilst demanding that the government cuts its spending and raises taxes that most negatively affect consumer demand.

Thursday, 26 May 2011

Womens' Unpaid Labour

Extracts taken from an article published at

The consulting company Sedlak & Sedlak have presented a report on the topic of women's domestic work, which analyses data taken from the Central Statistics' Office (GUS) for the IV quarter of 2010.

This shows that there are over 16.6 million women living in Poland aged over 15. From this group 7.2m are working, 0.79m are unemployed and 8.6m are economically inactive. From this last group 3.97m are retired, 1.61m are studying and 1.2m are unable to work due to a sickness or disability. As many as 1.42m women do not work due to their family obligations related to running a household. In other words, 1.4 million Polish women have full contracts as Mothers, housewives and carers, the vast majority of whom do not receive any payments and are also therefore unable to gain a pension or health insurance.

The authors of the report refer to estimates made by GUS in 2005 that show how the work of an employed women is worth on average zł270 a week, i.e. 1200zł a month; and the work of those who are not employed is worth around 310zł a week, i.e. 1350zł a month. According to research carried out by Beata Mikuta at the end of the 1990s the domestic work carried out by wormen is worth the same as a high average wage in Poland, which if paid would add about 23% to the country’s GDP.

Monday, 23 May 2011

Czech Pension Plans Spark Protests

Around 50,000 trade unionists demonstrated in the Czech capital Prague on Saturday against the government's plans to further privatise the country's welfare system.

At the heart of the right-wing coalition's plans is the proposal to introduce a new "second pillar" private-sector pension scheme to compete with the state pay-as-you-go system. This blog has previously analysed the effects a simliar reform that was introduced in Poland at the end of the 1990s. As well as further repressing pensions and introducing more inequality into the system, it also contributed to a large increase in public debt.

In anticipation of such an outcome, the Czech government has simultaneously proposed a series of reforms to compensate for this loss of income. These include raising the pension age; creating an increased flat-rate of VAT; introducing a new wave of privatisations; increasing payments for health care and cutting social benefits. This means that large areas of the country's social services will be removed from the public sphere and made available for private profit.

The Czech trade unions are threatening a new wave of protests against the government's plans. The coalition government is already unstable and it is unclear whether it will be able to last the remaining four years of its term in office and push through these proposals. It plans to take them to parliament in June.

Wednesday, 18 May 2011

Tusk Picks Up the Scraps

As Poland's parliamentary elections loom in the Autumn the game of political musical chairs has begun. The most significant development so far has been the high profile left MP - Bartosz Arłukowicz - joining Donald Tusk's government. Although Arłukowicz was not a member of the SLD he was an important and high-profile member of SLD leader Grzegorz Napieralski's team.

In recent days persistent rumours have also been circulating in the media that Donald Tusk is going to offer a number of other prominent left figures positions on PO's electoral list at the forthcoming elections. The majority of these are from the Social Democratic Party of Poland (SdPL) and include people such as Dariusz Rosati, Isabella Sierakowska and Józef Pinior. It seems that Tusk is attempting to incorporate parts of the left into the ranks of PO. Why would he want to do this?

PO were able to win the 2007 parliamentary elections by riding the popular wave of anti-PiS sentiment within the country. PO was seen as being the only party capable of defeating PiS and was therefore able to win the support of a significant section of the SLD electorate who were most concerned with removing Kaczyński's party from office. PO are now trying to repeat this trick through firstly weakening the SLD, by bringing some well-known left figures into PO and thus giving the party a left face during the elections. Secondly, they are spreading fear in the media that if PO do not win the elections then the SLD is likely to form a governing coalition with PiS. This strategy is dangerous for Tusk and PO for two reasons

1. By reaching out to parts of the left, Tusk is potentially isolating and building hostility within other sections of his party. Tusk has attempted to build a broad centre-right party capable of dominating Polish politics and within PO there exists a strong conservative wing. PO has always been a conservative party on cultural and social issues - opposing for example the state funding of in-vitro treatment for couples and refusing to liberalise the country's draconian abortion law or recognise the legal status of same sex relationships (the SLD have put forward a bill in parliament on this issue this week.) As Jarosław Gowin - the major representative of PO's conservative wing - has stated: 'I joined a conservative-liberal party, not a left-liberal one'

PO has also been built upon a political base that has a strong ideological commitment to liberal economic policies. The party has already disgruntled part of this electorate, when it partially nationalised the private pensions system earlier this year. Although in reality this electorate has no other serious political option other than voting for PO, Tusk must ensure that it mobilises its core electorate to come out and vote for it this year.

2. Also the incorporation of individuals connected to the SdPL (of which Arłukowicz was formerly a member) into PO may conversely strengthen the SLD. Let's remind ourselves of the history of this party.

The SdPL was formed as a breakaway from the SLD in 2004, in the wake of the collapse of the Miller government. Led by the then Speaker of the House, Marek Borowski, the SdPL promised to build an authentic, broad and democratic social democratic party in Poland. Many honest activists of the left were drawn to this project in the hope that it represented a potential breakthrough for the Polish left. However, it quickly transpired that the SdPL was not constructing a social democratic party but a social liberal one that sought an alliance with the now evaporated liberal centre. It is a popular political myth that Napieralski has led the SLD into a political cul-de-sac and reduced support for the party. Although the SLD should certainly attempt to broaden its political appeal, the strategy of reaching out to the liberal centre has continually reduced support for the left not increased it (see my previous post on Blairism in Poland).

Therefore while the SLD only won 11% of the vote at the 2005 elections, the SdPL gained less than 4%. Likewise when the two parties ran on a common slate with the liberal Democratic Party (PD) in 2007, the combined vote for the left was just 13%. Many on the left have not forgiven the SdPL for splitting the left and with PO looking like the destination point for many of its leading figures it will increase hostility towards them. The SdPL has now ended up as a collection of generals with no army, desperately seeking a new political home. So much for building a new kind of genuine social democratic politics in Poland.

As the parliamentary elections approach, with only the SLD as the sole left representative, it is imperative that it attempts to unify the left vote around it. Rather than trying to manoeuvre itself into positions in any future hypothetical governing coalition - with either PO or PiS - it should be clearly setting out an alternative to the right. This would mean laying out clearly a set of political principles on which it refuses to compromise in any future coalition negotiations (e.g. against the privatisation of hospitals or for the state funding of in-vitro treatment). In this way the SLD would show how it is a party of political principle in contrast to its defectors who are already involved in the unseemly game of seeking political office at all costs.

Tuesday, 17 May 2011

The Defeat of Blairism in Poland

Below I publish a translation of a presentation that I made at a conference on the Polish left, organised by the Ferdinand Lassalle Centre For Social Thought at the end of 2009 in Warsaw.

This paper considers how Blairism and the theory of the Third Way were an attempt to halt the general decline of classical social democracy in Europe and at how its failure has opened up a political and theoretical impasse within the European left. In turn it analyses the defeat of the post-communist left in Poland and at looks how its adoption of policies close to those espoused by Tony Blair in the UK helped to cause its decline and isolation.

Crisis of Social Democracy

The crisis of social democracy is a crisis of capitalism. Moreover, this is a double crisis that reflects the breakdown of the two models of capitalist development existent in post-war Western Europe. The first of these is the coming to an end of the nation based social welfare model, which had been dominant in Western Europe from the end of the Second World War until the mid-1970s. As Zygmunt Baumann has stated: ‘It is no longer possible to construct a ‘social state’ that guarantees existential security to all its members within the framework of the nation-state.’ The failure of social democracy to realise the deficiencies of this model, as the economy increasingly globalised, meant that it assumed a conservative stance of protecting a system that could no longer be defended. The mantle of ‘progress’ was handed over to the right – with the left failing to promote an economic model that could have both retained and expanded upon the very real gains of the post-war period.

The social democratic consensus, built in Western Europe after the Second World War, was based on the surmise that the extremities of the market economy had been controlled and that capital accumulation (and investment) was at one with full employment and the Welfare State. However, the slowdown in the world economy, starting in the late 1960s, opened up questions which many thought had already been answered. The existence of permanent inflation had been a feature of the post-war boom, but this situation became unsustainable, especially after the oil crisis in 1973/74. By the late 1970s Western European social democracy was in decline as growth rates fell, inflation accelerated and unemployment rose. Keynesianism was unable to reverse the economic downward spiral in the major European industrial economies and a monetarist reaction blamed social democracy for excessive state spending, inefficiency and stagflation.

The resulting slowdown in European economic growth and the return of phenomena such as mass unemployment, convinced European capital that there needed to be a transformation in the West European economy to make it more competitive with the USA and Japan. High wages, trade union rights and welfare benefits were once again viewed as being particularist and something which restrained further growth. However, a class compromise had existed in Western Europe since World War Two and in the 1980s the dismantling of this compromise was seen as being politically dangerous. This situation was dramatically changed by the events of 1989 and the collapse of Communism in Central Eastern Europe. No longer potentially threatened by communism from the East, European employers felt they had a once-in-a-lifetime opportunity to take on the domestic forces resistant to what they saw as the indispensable rationalisation and integration of the West European economy. One of the results of this opening was the completion of the Maastricht treaty by the end of 1991, which set out a monetarist framework for European economic and political integration.

A New ‘Third Way’

The social democratic consensus was broken up by the entwined events of the ending of the post-war economic boom; the ensuing neo-liberal offensive and the collapse of ‘real-socialism’ in CEE. This first crisis opened up a widening schism between social democratic parties and their traditional electorate. These parties were unable to provide their populations with socio-economic guarantees of progress and protection, leading to a contraction of their electoral base. This reality was partly recognised by Tony Blair, expressed in the theory of the Third Way, which was used as the theoretical justification for the New Labour project in the United Kingdom. It understood that we are living in an expanding global economic and cultural environment. It realised that social structures are changing and that in order for social democracy to survive and prosper new alliances had to be made and that social democratic parties must widen their social and political base.

Blairism, and the project of reforming the British Labour Party, was the ideological expression on the left of the attempt by European capital to open up a new era of neo-liberal reform in the continent. This required the building of a new political hegemony, that incorporated part of the left, especially in conditions where the right had suffered a political contraction. This was the case in the United Kingdom, where the British Conservative Party, after 18 years of governance, only managed to gain 25% of the parliamentary seats at the 1997 elections. In such a situation the Labour Party assumed the mantle of continuing the course of neo-liberal reform, with Blairism standing as a model for other European social democratic parties to emulate. This reached its peak at the end of the 1990s, when Tony Blair published a joint manifesto with the German SPD leader, Gerhard Schroeder.

Despite the fact that Blairism represented a rightward version of social democracy it is not correct to state that it was simply a new face of neo-liberalism. The political base of Blairism continued to be the electorate and membership of the left. Therefore, Blair had to appeal to and win the support of this political base by claiming that its new adherence to free-market economics was a means to implementing policies that adhered to the traditional principles and values of the left. Blairsm sought a theoretical justification for its policies in the theory of the Third Way, developed by the renowned British sociologist Anthony Giddens.

The Third Way is built upon many of the theoretical assumptions made during the post-war period; most notably that industrial capitalism has structurally changed, as it moves from first to second stage modernisation. Such ideas were given further impetus through the spread of the world-wide communications revolution, the arrival of the so-called ‘weightless’ knowledge based economy and the realities of a post-1989 world, after the fall of communism. Accordingly, the trading of information and knowledge was seen as being the essence of this ‘dematerialised’ economy, as what is important is not how or where a product is manufactured but what its ‘definition’ is. Modern industrial society is therefore seen to have entered a ‘post-materialist’ era, which has been accompanied with the downsizing of the industrial working class. Giddens argues that voting behaviour no longer conforms to class lines which, alongside the decline in the size of the industrial working class, means that social democracy’s traditional electoral base disappears. These ‘shifting sands’ cut the traditional connection between political parties and social classes and transcend the established left-right dichotomy. Accepting this reality means social democracy looks towards the political centre, termed by Giddens the ‘active middle’ or ‘radical centre’.

For Third Way theorists this decline in class-based politics helped to cause the death of socialism as an alternative system, whilst the collapse of communism in Eastern Europe furthered the need for social democracy to break from the past. The changing international environment means that the left has to accept some of the policies of the right, just as the right had to adopt some from the left (such as the Welfare State) in the post-war era. This principally includes supporting the process of privatisation and being ‘critical of an over extended state and welfare system.’ Supporters of the Third Way believe that social democracy should retain some of its previous values (such as solidarity, social justice and protection of the vulnerable) but that the ‘old strategies and institutions can no longer deliver these.’ In the post-communist world, Third Way social democrats have become strong advocates of the market, as a means for furthering social justice. Capitalism and an efficient, dynamic market economy are seen as going hand in hand with fairness and social justice and in turn social justice helps the smooth running of a market economy. The Third Way variant of social democracy claims it wants to use the tool of the free market to increase social justice. In fact, it is argued, the Third Way assumes the mantle of reform from the right, which holds back further modernisation due to their social conservatism, nationalism and/or extreme neo-liberalism.

Assessing Blairism and the Third Way

When we analyse of the Third Way, in retrospect, I believe that we can identify some positive features this theory. These include:
1. Its understanding that the previous model of social democracy had been exhausted and that the nation state, within a globalised economy, is no longer able to defend society as it once had.
2. Connected to this is the conception that the left has to think and act globally.
3. The belief that the left should attempt to expand its social base of support and build a new political hegemony.

However, these positive features are outweighed by its negative elements which prevented it from becoming a model for a renewal of European social democracy. These include:
1. The idea that capitalism has fundamentally changed and that only the free market can ensure steady socio-economic development.
2. That the new middle class has grown to be a majority of society and that we now live in a post-class society where the individual is prominent and the concept of social class is no longer applicable.
3. That the left should seek to expand into this new middle class and the growing political centre.

This paper does not provide the space to adequately assess the impact of Blairism and the Third Way on British and European social democracy. Briefly we may note how initially they contributed to the British Labour Party taking advantage of the collapse in support for the British Conservative Party and winning three general elections. For the first eleven years of the Labour Party government, the British economy enjoyed continued economic growth and unemployment declined. Simultaneously the Labour government heavily invested in some public services (such as health and education) after nearly two decades of neglect. However, the present economic crisis has hit the British economy hard and revealed how its growth was dependent to a large extent on a credit boom that had been expanded during the years of financial deregulation started by Thatcher and continued by Blair. Even where the Labour government had differed from the Conservative governments, as in increased public spending, this was often combined with a programme of part-privatisation and commercialisation of these sectors.

The third way was built upon a supposed pragmatism, whereby policies of economic ownership or taxation would be decided not a-prior according to principle, but by what actually works. However, the further that Blairism developed the more it became clear that it was ideologically attached to the free-market. Furthermore, its supposed pragmatism was exposed internationally after Tony Blair’s government supported the war against Iraq and formed an alliance with George Bush’s neo-conservative administration in Washington. This created a large political schism between the government and its political base, with many questioning their support for the Labour Party.

After some initial success the Third Way and Blairism lost support within the major social democratic parties in Europe. For example Schroeder was pushed to the left by the trade unions and his social democratic core constituency, leading him to oppose the war in Iraq. Schroeder distanced himself from Blairism, dropping references to his own New Middle theory. His adherence to a more interventionist economic policy helped him to return to power in 2002. However, after re-gaining office he once again announced the introduction of a new wave of neo-liberal reforms, including easing job protection, cutting unemployment and sickness benefit and relaxing the rules on collective bargaining, which contributed to the SPD’s defeat at the 2005 elections. In recent years there has been a turn to the right in European politics, with social democracy marginalised in most European countries and unable to capitalise on the discrediting of the neo-liberal model of capitalism inflicted by the present economic crisis.

Blairism and the Polish Post-Communist Left

Throughout its existence the post-communist left in Poland has sought external allies, something which has been particularly needed in the post-communist reality where the left has continually been threatened with isolation. The strategy of Aleksander Kwaśniewski has always been to build an alliance between the left and the liberal centre. After the 1993 and 2001 elections the Democratic left Alliance (SLD) proposed a governing alliance with the liberal centre, yet both times these approaches were rejected. This meant that the left had to form an alliance with the Polish Peasants' Party (PSL), which (especially during the first SLD government when the PSL was a large coalition partner) restrained the government’s ability to implement free-market style policies.

In 2001 the SLD gained power after the collapse of the right-wing AWS-UW government. The electorate had rejected the extreme neo-liberal policies of this government, which had led to economic growth declining from around 7% to 1% and unemployment soaring from 10% to over 17%. The left was therefore gaining power in similar conditions to those when Tony Blair’s government was elected in the UK – i.e. after the collapse of a right-wing government. In the run up to the 2001 elections, the leadership of the SLD began to openly associate themselves with Blairism and the Third Way. For example in 2001 the SLD leader, Leszek Miller, wrote:

I spoke with some theoreticians from the Labou Party about the 'third-wa' (...) and I asked them whether we are not actually moving ot the centre but to the right. In answer I heard that we are not going to the right but forwards. This is a nice saying, which doesn't explain everything but i our case makes sense.

When the SLD came to power in 2001, in contrast to 1993, the Polish economy was stagnating, unemployment was rising and the government had less resources to tackle these problems. The new SLD government inherited a financial crisis from the AWS/UW government, spurred by economic stagnation and rising unemployment. Shortly before the 2001 parliamentary elections the SLD’s Finance Minister elect, Marek Belka, had announced that he would push through austerity measures to rebalance the budget, an action that may have cost the party an overall majority. Belka was closely connected to Kwaśniewski, who represented the most neo-liberal wing of the post-communist left.

The second SLD government pursued a Blarite strategy of liberalising the economy, hoping that this would instigate economic growth which in turn would provide the resources to improve social services. However, in a state of constant conflict with the RPP over reducing interest rates, the government’s policies were unable to improve the country’s socio-economic situation. In the first two years of the SLD government, economic growth only marginally picked up and unemployment grew from over 17% in 2001 to 19% in 2004. When the government attempted to introduce a more interventionist set of policies (as for example when Grzegorz Kołodko was re-appointed as Finance minister) this was blocked by the actions of Kwaśniewski, the NBP/RPP and the demands connected to entering the European Union.

Facing a political crisis PM Leszek Miller (who historically had been connected with the more pro-social wing of the post-communist left) came out strongly in favour of neo-liberalism. In an attempt to strengthen his position he began to talk as a supporter of neo-lieralism a manner that even surpassed that of Kwaśniewski or Blair. In November 2003 Miller declared:

Generating national wealth and its redistribution are to a large extent separate spheres. the first is decided by the hard and objective laws of economics an dthe maret and the second by social justice. Policies must have a liberal character becuase the market can only fulfill its potential in conditions of a free economy. The problems of society must not be placed on the market not should ideology be an impediment for the free market. Economic growth will be quicker through low taxes, a low budget deficit and better management of budget resources.

Concurrently Miller’s government took a sharp neo-liberal turn – personified by the replacement of Kołodko as Finance Minister by Jerzy Hausner. At this point we can in fact say that the SLD government moved from a Third Way position to a clear neo-liberal one. The so-called Hausner Plan (presented by the government to solve the economic crisis) proposed a package of neo-liberal reforms that included liberalising the labour code, decreasing social benefits and reducing the business tax.

We can see therefore how the second SLD government was unable to follow a Third Way social democratic programme and ended up adhering to a classic neo-liberal one. This can be shown by the failure of the government to increase spending in public services, which in fact declined during the course of the SLD administration. For example while in 2001 spending on education equalled 4.6% of GDP, this had declined to 4.1% in 2004. Similarly, government health spending reduced from 3.3% in 2001 to just 3.1% in 2004. The SLD government also moved away from its left values on a number of other issues. The SLD government became strong supporters of the USA, sending troops to Afghanistan and Iraq and signalling its interest in supporting a National Missile Defence System on Polish soil. The reality of a host of new ‘pro-US’ states entering the EU was driven home when the signatures of Poland, Hungary and the Czech Republic were added to the UK sponsored letter supporting a war against Iraq. Donald Rumsfield’s subsequent definition of ‘old Europe’ and ‘new Europe’ helped to crystallise this division. The government also failed to live up to its social-liberal policies – by not, for example, liberalising Poland’s draconian abortion law.

The inability of the government to meet its social democratic pledges, and the growth of corruption allegations, led to the break up of the government and a split in the SLD. After standing down as SLD leader, Miller resigned as PM on 2 May 2004, i.e. the day after Poland joined the EU. Kwaśniewski appointed Marek Belka (who returned from his post as financial advisor in Iraq) to form a government of ‘experts’, as the SLD-led administration fell apart. The party opened up a process of verification of SLD members (whereby all members had to reapply for membership), as a public action against corruption in the party. Rather than clearing out a small, corrupt minority, the party initially lost over 35% of its membership. Also some leading members of the SLD left to form a new party: The Social Democratic Party of Poland (SdPL).

Once Again to the Third Way

By the 2005 elections a new younger leadership of the SLD had been created around Wojciech Olejniczak and Grzegorz Napieralski. This new leadership tried to present itself as being a break from the past, yet it essentially continued with the Third Way policies of Kwaśniewski and Miller. Olejniczak was promoted by Kwaśniewski as being the most suitable candidate for SLD leader and he openly declared that his role model internationally was Tony Blair. The SLD suffered a huge defeat at the 2005 elections (with its vote falling to 11% after gaining more than 40% in 2001) from which it has yet to recover. The 2005 elections pushed the left back to the position it had been in before 1991. For the first time after losing an election, the left was not the largest opposition group in parliament and it was unable to win in any of the country’s 41 constituencies. Despite this defeat, the SLD still won nearly three times as many votes as the SdPL, who failed to enter parliament; and the new leadership greeted the SLD’s result of 11% as a triumph.

Following the huge defeat in 2005 the left has been isolated with two parties from the conservative right dominating the Polish political scene. A debate within the post-communist left was begun shortly after these elections about what political and organisational strategy it should adopt. The major idea to emerge out of this discussion was that of creating a new centre-left alliance (centrolew) uniting the left and liberal centre against the project of the conservative-nationalists. This project eventually crystallised into the electoral alliance Left and Democrats (LiD) – which united, among others, the SLD, SdPL and Democratic Party (PD). Supporters of this project compared the situation in Poland to that which existed in the 1930s and argued that the Law and Justice (PiS) government was attempting to create a conservative-nationalist hegemony. In order to counter this, the left would need to build an alternative hegemonic project, though forming a strategic alliance with the liberal centre. While many of the fears concerning the building of a new conservative hegemony were justified (and have been vilified) the new left counter-hegemonic project was to be based upon a conception of capitalism derived from the ideas of the Third Way.

Protagonists of the centre-left project upheld the belief that capitalism had entered a post-materialist era and that the centre-left should seek to win support from the growing middle class. For example, Andrzej Celiński appealed to the young educated professionals, who are self-employed or work for new private firms. Likewise Napieralski (writing then as a supporter of building an alliance with the liberal centre) wrote that the industrial working class grouped in trade unions is no longer significant in modern society and that they have been replaced by independent specialists on the labour market. According to Napieralski the left should therefore support those individuals who are excluded from the market and increase their activities in the spheres of culture and education.

The concept of building a centre-left alliance, embodied in the political project of LiD collapsed after the 2007 elections when LiD gained just 13% of the vote. This was nearly 5% less than the combined votes of the parties that made up LiD during the 2005 elections. This strategy has led to the defeat and isolation of the post-communist left in Poland, as it is built upon a conception of the Polish social and political structures that does not fit reality. Shortly after the 2007 elections Olejniczak lost his position as leader of the SLD and was replaced by Napieralski. With the SdPL and PD suffering an even deeper isolation and contraction the SLD now stands as the only major party of the centre-left in Poland. Since becoming SLD leader, Napieralski has broken from the policies of the Third Way and the idea of forming an alliance with the political centre. However, his political strategy seems to be one of maintaining the parties core political support and presenting himself as a loyal representative of the party. Such a strategy may have helped to win the support of the party’s core electorate, but it has failed to expand into a party that could genuinely challenge the existing right-wing hegemony in Poland.


Blairism and the Third Way grew within European social democracy as an alternative to the declining nation-state centred model of social democracy prominent after World War Two. While it offered some genuine critique of this declining model, it adhered to many of the assumptions and precepts of neo-liberalism, which, when carried out in practice, led to the decline and not expansion of support for the left. The left is unable to expand its support through moving to the political centre but by understanding that although the social structure has changed over the past few decades this does not mean that we live in a post-class, individualist society where the free-market provides the means for economic growth and social justice. In fact the present economic crisis has shown that the opposite is true and that the left should begin to consider what economic model can be introduced to ensure the growth needed to build social equality and social justice.

Monday, 16 May 2011

Local Governments Invest More and Have Lower Debt

As noted elswhere on this blog the Polish central government s pressuring local governments to decrease their debt. This is part of the government's general attempt to bring down its defict to below 3% by 2012. The Finance Minister has produced a plan that states that local goernments will not be able to have a deficit as a percentage of its income above 4% in 2013, 3% in 2014 and 1 % in 2015.

This has come under heavy criticism from local governments and others who recognise that local governments have most successfully managed to gain EU funds and invest in infrastructural projects in recent years. Representatives of local governments have rightly argued that it is their investments that have managed to keep the Polish economy growing throughout the global economic crisis and help it avoid falling into recession.

Today's Gazeta Wyborcza has published some interesting statistics that show how local government's have not only been investing the most but also how their level of debt is miniscule in relation to that of central govenrment:

Public Money (bn złoty):

Central Government: 300

Local Government: 170

Investment Expenditure (bn złoty):

Central Government: 15

Local Government: 40

Public Investment (%)

Central Government: 5
Local Government: 23.5

Share of Public Debt (%)

Central Government: 94.2
Local Government: 4.8

Debt in Relation to Income (%)

Central Government: 227
Local Government: 26

Tuesday, 10 May 2011

Referendum Against the Privatisation of Warsaw's Heating Network

Below I publish an article concerning the campaign for a referendum in Warsaw on the privatisation of the company running the city's heating network. The article first appeared in Polish in the blog Zielona Warszawa

The Greens along with the Warsaw branch of the Democratic Left Alliance (SLD) and trade unions have initiated a campaign for a referendum on the privatisation of the company that runs Warsaw's heating network (Stołeczne Przedsiębiorstwo Energetyki Cieplnej - SPEC). They now have sixty days to collect the signatures of Warsaw residents supporting the resolution for a referendum.

'SPEC is a company of strategic importance for the quality of life of Warsaw's residents. The local government should have complete control over this company. Only then can it have an influence over the development and investment in the company, the modernisation of the heating network and the quality of its service. The experience of other towns shows that the privatisation of public utilities leads to an increase in their price and a deterioration in the modernisation of their infrastructure' said Kristian Legierskia Warsaw Councilor and member of the Greens. 'The risk that the cost of heating will rise is very real when the Energy Regulatory Office does not guarantee the maintenance of current prices. The risk is even greater as SPEC is a natural monopoly. If Varsovians are not satisfied with the quality and price of service after privatisation they will still be compelled to buy from this private supplier of heating.'

'The decision to privatise SPEC is economically unviable. In an ad-hoc bid to rescue its budget the city government wants to sell off one of its most profitable companies. In 2010 the company made a profit of 82 million zloty, whilst simultaneously investing significantly in its infrastructure. The sale of SPEC would deprive the city of a guaranteed profit' - said Agnieszka Grzybek, a member of the National Council of the Greens. 'The local government unfortunately is deaf to all rational arguments and has ignored all attempts to discuss the merits of SPEC's privatisation. Even worse it has independently made the decision to privatise SPEC, bypassing the council. For this reason we believe that the residents of Warsaw should be able to express their own opinion on this matter.'

Sunday, 8 May 2011

Trade Unionists not Hooligans

Just as a hooligan cannot pretend to be a football fan so a hooligan cannot pretend to be a trade-union activist.

These are the words of PM Donald Tusk following a violent confrontation between Miners' trade unionists and security workers last week outside of the headquarters of the mining company KGHM. Comparing the demonstrators to the hooligans that have recently blighted Polish football, Tusk has identified trade unionists as the new 'enemy within'.

In recent months a number of political commentators have warned of the 'threat' posed by trade unions. It is claimed that these trade unions have held the country to ransom with unreasonable demands and are led by overpaid bureaucrats that do not sufficiently represent their membership.

The fact remains that only around 13% of all those employed in Poland - around 1.3m people - are members of trade unions. These tend to be based within the remaining state industries, the public sector or former state monopolies that have been privatised.

Trade unions are virtually non-present within the new private companies that have arisen throughout the past 20 years. This means that the vast majority of Poles do not have the option to join a trade union - with research showing that nearly a half of those questioned state that they are not a member of a trade union because there are no trade unions where they work.

The absence of trade unions has resulted in Poland having the longest working hours in the OECD apart from South Korea and has left millions of workers on unstable short-term contracts. This has meant that those who are covered by trade unions have been signalled out by the government and its allies as having 'unfair privileges'.

The Miners are a perfect example of this. In relative terms miners in Poland earn well and enjoy a number of bonuses and early retirement rights. These are derived both from the ardious and dangerous work that they do and from the high status that they had during Communism. Also the strong trade unions in the sector has meant that Miners have been able to retain these rights.

Last week around a 1000 Miners organised a picket outside the offices of the KGHM Mining company in Lublin. For over 3 years these workers have been demanding a 300 zloty a month pay rise, which has been consistently refused by the owners of the company. The anger of the Miners can be understood as KGHM recorded a record profit in 2010 of over 4.5bn zloty. Furthermore, the board of directors voted themselves huge pay rises last year. The monthly salaries for the Presidents of the company rose from 40,000 to 75,000 zloty a month (i.e. an increase of 90%). This salary rise was also supported by the representatives of the State Treasury that sit on the board.

With profits and board salaries soaring and inflation exceeding 4%, the request for a 300 zloty pay rise seems far from excessive. It was the the unfairness of this situation that led to the outbreak of violence at the picket last week. However, rather than the government recognising the realities of the situation, it has opted to score cheap propaganda points through further demonising the trade unions.