Thursday, 30 June 2011

Balcerowicz's Tragic Revolution (Part 2)



Below is the second part of Piotr Szumlewicz's article published on the website Labour Notes.


In the years 2001-2007 Leszek Balcerowicz was the chief of the National Bank of Poland and because of that position he had to tone down his comments. Shortly afterwards he went back to political quarrels. Without any particular position in government Balcerowicz was still present and active in public debates. Even though he had a lot of experience in handling the economy Balcerowicz during this time as well presented himself as an economist who made one mistake after another in most of his diagnosis.

Hardly anyone remembers that just before the economic crisis in Ireland, he was praising the achievements of the Irish government; that the Baltic republics — just a few months before the gigantic collapse — were an example to follow. A number of times he prophesied the collapse of Scandinavian countries at a time when these countries were leading and still lead in the rankings of competitiveness, technology development and the standard of living. For a number of years Balcerowicz has been misleading the public, talking about the supposed high spending on social security in Poland, though the amounts of money put aside for such purposes are amongst the lowest in the European Union. He gives also false information on the huge fiscal loads, the GDP is 6% lower than the European Union average.

Balcerowicz has become to be known as a dogmatic ideologist who defends compromised ideas, not caring about the consequences of their implementation. The main objects of his attacks are those who are under social welfare, the jobless, pregnant women, mothers, workers in the public sector. In every quarrel he was on the side of the strong against the weak, he promoted unequal redistribution, his solutions were to reward those who are already successful and take welfare from those who did not make it.

In the last few years the popularity of Balcerowicz has been on the wane. Continuously repeating the same things, he is not attractive anymore even to the liberal media given the fact that the same ideas have been announced by government representatives. With the help of Balcerowicz there is a crisis. The private sector disappoints and without the intervention of the state it is difficult to work against negative trends. This is when the ministers in Donald Tusk’s government admitted that there was a need to undermine the neoliberal dogma and raise taxes as well as expanding the role of the public sector in the pensions system. In this situation Balcerowicz became one recognizable defender of neoliberal orthodoxy. A number of journalists speak about the big quarrel between “old liberals” and Balcerowicz. Everyone can see that Balcerowicz’s views are a sign of free market fundamentalism, which no one treats seriously in Western countries. How can you defend OFE in a situation when, in only a space of one year they have lost 20 billion PLN and their servicing is much more expensive than ZUS? How can you defend the lowering of taxes in a situation where the deficit in public finances is going up and the taxes in Poland are among the lowest in Europe? How can you demand cuts in social spending, when it is one of the lowest in Europe and the indicators of poverty among the highest? How can you demand that there has to be a reduction in aid and for the tightening of the criteria for giving aid when it is already the lowest and the most selective in the European Union? How can you demand for a reduction in the minimum wages despite the fact that they barely pass the social minimum? How can you dogmatically campaign for the privatization of public companies which bring in millions for the country every year?

More than twenty years have passed since Balcerowicz started his career in big politics. His present proposals are not in any way different from those that drove the country twice into economic and civilizational regression. Balcerowicz wants to limit the worker’s rights again taking help from the jobless, farmers, pensioners and the sick. At the same time he wants to support businesses, banks, pension funds. The rich are to get richer at the expense of the poor. Do we really need that model? Is it worth our time to treat Balcerowicz’s views as a sensible programme for reform? One of the advantages of a democratic system is the ability to learn from mistakes. Leszek Balcerowicz has already had two chances. He has not used even one of them and he has not learnt anything. He does not deserve another chance given the fact that he will not propose anything new.

Piotr Szumlewicz
Translation: Marlon Nziramasanga

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