Avoiding the Economic Crisis: Pragmatic Liberalism and Divisions over Economic Policy in Poland

Abstract

Although liberalism has been the dominant economic ideology in post-communist Poland, liberal parties have tended to struggle to win political majorities. After winning the 2011 parliamentary elections, Citizens' Platform (Platforma Obywatelska) became the first party in Poland's democratic history to win two consecutive elections. Despite its liberal ideological background, Platforma Obywatelska took a more pragmatic and cautious approach to economic policy, avoiding the introduction of strong austerity economic policies. This paper considers the debate within the liberal camp about Platforma Obywatelska's economic policies, with particular reference to the reform of pensions. It also looks at the plans of the government for more strident liberal economic reforms in its second term, at what impact these will have on the popularity of Platforma Obywatelska and at how this reflects a tension between the party's pragmatic concerns of government and commitment to liberal ideology.

Notes

¹ ‘Junk contracts’ refer to various forms of temporary employment contracts that can offer very little protection against arbitrary management, or even contracts based on civil and not employment law, which enable employers to avoid all legal obligations towards employees. Whilst the average percentage of workers employed on a contract of a limited duration stands at less than 15% in the EU, in Poland it reaches 27%. Furthermore, this has increased by more than five times since the beginning of the century, with just over 5% of workers employed on such contracts in 2000 (Eurostat, ‘Employees with a Contract of Limited Duration (annual average) % of Total Number of Employees’, available at: http://tinyurl.com/7c56bab, accessed 9 August 2012). A report by the government, Raport Młodzi 2011 (Szafraniec 2011), revealed that over 60% of workers aged under 25 are employed on ‘junk contracts’. This is further compounded by the large number of self-employed workers in Poland. A total of 19% of all those working are self-employed, which is the fifth highest number in the EU after Greece, Italy, Portugal and Romania (Szafraniec 2011).

² This neo-liberal hegemony has an international dimension. For example, neo-Gramscian theorists have analysed the post-communist transition and integration of new members into the EU as an extension of the hegemony of international capital and the expansion of neo-liberal hegemony (Bieler 2002; Bohle 2006; Bohle & Greskovits 2007).

³ This included the idea of building a new Fourth Republic in Poland. Although this idea became associated with PiS it was actually first prominently aired by the historian and PO MP Pawel Spiewak (2003). By the mid-1990s Tusk had advanced a general critique of the Polish transition. He claimed that a political ‘vain class’, numbering around 100,000 people, had usurped power and created a corrupt political system. He promoted the politics of anti-elitism, opposing the liberal establishment and drawing upon the historical tradition of Józef Piłsudski and his campaign to cleanse the state known as Sanacja (Rae 2007).

⁴ Berlin for example put forward two concepts of liberalism: positive liberty and negative liberty. Negative liberty concerns the removal of constraints that the state places upon an individual. In contrast positive liberty refers to the resources and power available to fulfil one's own potential. The idea of positive freedoms had previously been postulated by T. H. Green in the nineteenth century, who regarded them as freedoms that allow an individual to pursue something that is truly good and therefore implies doing good for others. He challenged the traditional idea that freedom concerns being free from state intervention and argued that freedom should not be seen as a person's power to do as he or she likes, but rather as the power to do something valuable for other people. Green strongly supported the new legislation being introduced in Britain from 1868 that regulated spheres such as employment and education (Dimova-Cookson 2003).

⁵ ‘Pierwszy po premierze’, Gazeta Wyborcza, 31 January 2012.

⁶ Eurostat, ‘Total Government Expenditures’, available at: http://tinyurl.com/6of4mvce3lo2z, accessed 9 August 2012.

⁷ It should also be borne in mind that there is a relationship between public and business investment, as increases in public investment can help to maintain investments by private companies.

⁸ This came after the Democratic Left Alliance (Sojusz Levicy Demokraticznej, SLD) government had cut the business tax rate from 27% to 19% in 2004 (Szumlewicz 2011).

⁹ In Poland the Ministry of the Treasury is separate from the Ministry of Finance and is responsible mainly for the management of nationally-owned assets.

¹⁰ ‘Rzęd: przychody z prywatyzacji w latach 2012–13—ok. 15 mld zł’, onet.biznes, 27 March 2012, available at: http://biznes.onet.pl/rzad-przychody-z-prywatyzacji-w-latach-2012-13-ok-,18543,5072475,news-detal, accessed 7 August 2012.

¹¹ OECD Social Expenditures Data Base, 2011, available at: http://www.oecd.org/document/9/0,3746,en_2825_501397_38141385_1_1_1_1,00.html, accessed 7 August 2012.

¹² This reform introduced a three-pillar system that maintained a state fund but introduced a compulsory second private pension pillar and a third optional private pillar.

¹³ ‘Co Dalej z Emeryturami? Dzisiaj Decyzja Rzędu’, Gazeta Wyborcza, 8 March 2011.

¹⁴ ‘Co Dalej z Emeryturami? Dzisiaj Decyzja Rzędu’, Gazeta Wyborcza, 8 March 2011.

¹⁵ See the website of the institute, available at: http://www.for.org.pl/pl, accessed 9 August 2012.

¹⁶ Rostowski had been Balcerowicz's adviser from 1989 to 1991 and then led the Macroeconomic Policy Council in the Ministry of Finance from 1997 to 2001. The fact that many members of the PO government, including Tusk himself, had been members of the government that introduced the initial private reform of the pension system added to the political tension between these two groups.

¹⁷ ‘Rzęd Miksuje Emerytury’, Gazeta Wyborcza, 1 December 2010.

¹⁸ ‘Rostowski znów dokręca śrubę samorzędom’, Gazeta Wyborcza, 10 December 2012.

¹⁹ ‘Premier wygłosił expose. Będę cięcia w ulgach i zmiany w emeryturach’, Gazeta Prawna, available at: http://tinyurl.com/cln9vre, accessed 9 August 2012.

²⁰ ‘Jestem prawicowym mastodontem’, Gazeta Wyborcza, 14 March 2012.

²¹ ‘Badanie TNS OBOP: Polacy nie chcę dłużej pracować’, WP.pl, available at: http://finanse.wp.pl/kat,9231,title,Badanie-TNS-OBOP-Polacy-nie-chca-dluzej-pracowac,wid,14348403,wiadomosc.html?ticaid = 1e5d, accessed 9 August 2012.