Deep hole (was: desired abduction/Small Business Offer)

Rosser Jr, John Barkley rosserjb at
Wed Jul 15 14:26:47 PDT 1998


[I go by "Barkley", not "John"]

A full listing of sources for much of it can be found in _Comparative Economic Systems in a Transforming World Economy_, 1996, by J. Barkley Rosser, Jr. and Marina V. Rosser, Chicago: Irwin, especially Chapter 12. Some of that is now out of date. For simple figures on current Polish macro conditions, check the final page of any recent issue of _The Economist_.

Was there any particular datum about which you are especially curious or doubting? Barkley Rosser On Wed, 15 Jul 1998 15:43:37 -0400 Carl Remick <cremick at> wrote:

> Re John Rosser's report on the Polish economy: Impressive level of
> detail, but how reliable are these data?
> -----Original Message-----
> From: Rosser Jr, John Barkley [mailto:rosserjb at]
> Sent: Wednesday, July 15, 1998 3:14 PM
> To: lbo-talk at
> Cc: lbo-talk at
> Subject: Re: Deep hole (was: desired abduction/Small Business Offer)
> Doug,
> I take it that you are referring to recent
> developments in Poland? The answer is that it is for real,
> but comes with a lot of unpleasant baggage, unsurprisingly,
> which has manifested itself in the inability of any
> government from 1989 on in Poland being able to get itself
> reelected. Indeed, the syndrome, common in several other
> CEECs (Central and Eastern European countries) is to elect
> a government that promises to undo or resist the various
> strictures of the IMF and the harsher aspects of the recent
> reform processes, only then under pressure of the IMF and
> international capital more generally to go along with such
> programs, thus leading to its inability to get reelected
> some years later.
> As of now, Poland may be the only country, with the
> possible exceptions of Slovenia and Albania, among the
> formerly Communist CEECS (note that neither Slovenia nor
> Albania were in the CMEA and thus did not suffer from the
> collapse of trade when the CMEA collapsed, although
> Slovenia took a trade hit when Yugoslavia broke up) to have
> achieved a per capita income level above what it had in
> 1989. And it does have a very high growth rate, around
> 6-7% per year. Several points, some positive, some
> negative:
> 1) This has been accompanied by a substantial
> increase in the inequality of income, although not as much
> as in Russia but more than in the Czech or Slovak
> Republics and about the same as in Hungary. Especial
> losers are the old and the rural, despite pensions being
> kept pretty high, although other social safety net
> spending has been reduced. The boom is largely urban and
> among the young.
> 2) There is a mid-teens unemployment rate, beginning
> to drift down slightly, but still pretty high for such a
> "booming" economy.
> 3) The original macro plan in 1989 was a "shock
> therapy" to break inflation, which did bring down the rate
> from hyper three digit levels to low two digit levels and
> included full convertibility of the zloty.
> 4) There is a significant similarity to the Chinese
> reforms, not frequently remarked upon (although it is in
> the book by Rosser and Rosser, 1996, :-)), that there was
> not a major privatization of the major state-owned
> enterprises (SOEs). Smaller ones were however. But as
> part of the shock therapy there was a major removal of
> subsidies to the remaining SOEs, that is, a hard budget
> constraint was imposed. This led some to shut down, thus
> exacerbating the unemployment problem. OTOH, the remaining
> SOEs have done reasonably well, much better than you would
> gather from reading the mainstream media, being moderately
> successful in exporting even in some sectors (helped by the
> devaluation of the zloty that happened in 1989, in contrast
> with what was done in the former GDR (aside to Michael P.,
> a good source on my claims about Germany is Wolfgang
> Stolper, Karl Hauser, (and a third author) _The Economy of
> Germany from 1870 to the Present_, 1967, English
> translation available)).
> As in the PRC the major growth has been among new
> firms that have grown up around the existing SOEs.
> Central planning did not need to be dismantled as it
> already had largely been during the 1980s. A difficult to
> quantify element is an alleged high degree of
> "entrepreneurship" among the Poles, who were heavily
> involved in a lot of the arbitrage trade across borders in
> the former CMEA after its collapse.
> In short, the new economy has grown up around the old
> economy without dismantling the old one fully, although
> Balcerowicz now wants to privatize the major remaining
> SOEs. A major block is that they are since the Jaruzelski
> tried to offset Solidarnosc by allowing workers' management
> is precisely that the worker-managers tend to oppose it.
> Also, Poland has been much less open to FDI than many other
> CEECs, partly out of fear of German domination.
> 5) Agriculture is pretty much of a mess. The attempt
> to collectivize was withdrawn after the Poznan uprising in
> 1956 and the fear of the resistance of the very
> anti-Russian, anti-Communist, and pro-Catholic peasantry.
> But the private plots in Poland are inefficiently small and
> the problems of trying to keep both the urban workers and
> the rural peasants happy were a source of downfalls of
> Polish governments even under the Communists. This
> continues to be a real sore spot and the rural sector is
> hurting.
> Barkley Rosser
> On Wed, 15 Jul 1998 12:55:23 -0400 Doug Henwood
> <dhenwood at> wrote:
> > Wojtek Sokolowski wrote:
> >
> > >If anything, it was 1989 - not 1945 -- when most EE countries stepped
> into
> > >a a very deep hole.
> >
> > What about Poland's alleged "boom"? Does anyone know what the real
> story is?
> >
> > Doug
> >
> >
> >
> --
> Rosser Jr, John Barkley
> rosserjb at

-- Rosser Jr, John Barkley rosserjb at

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