Western commentators are just starting to catch on. The majority of people in Central and Eastern Europe are not too keen on free market capitalism. It’s as simple as that. (photo – President Lech Kaczysnki, protector of the poor and vulnerable?)
They were shocked that Ukrainians have gone a little cold on their ‘orange revolution’. And why oh why did Poles vote in the populist, protectionist, free-market-skeptical, socialist(ish) Law and Justice party last autumn?
(I would include Lukashenko's 83% victory in the recent Belarus' election but I don't trust the result.)
It wasn’t so long ago that western neo-liberal and free marketeering commentators were bashing on and on about ‘New Europe’ – the ex-communist countries in Central and Eastern Europe – as the ‘champions of the small state with their entrepreneurial, ‘can-do’ spirit’. Poles and Hungarians were going to take the European Union by the scruff of the neck and shake all the protectionism out of Brussels. These countries were going to introduce flat taxes, a deregulated labour market, and build an economy unfettered by the not-so-invisible hand of the state.
One such commentator at the right wing Cato Institute, for instance, on the eve of Poland’s accession into the EU in 2004, wrote breathlessly:
“The accession of the new EU members threatens the post-war consensus regarding the social-democratic nature of the European economy. The type of economic arrangements that the Central and East European countries wish to follow seems unambiguous. While the French and the Germans agonize about the preservation of their pay-as-you-go public pension systems in the face of growing expenditures and declining ratios between workers and retirees, the Poles and Hungarians have partially privatized their systems. While the governments in "old" Europe prepare for battle with powerful labor unions, the "new" Europeans continue to liberalize their labour markets and attract a growing share of foreign investment. While Brussels seethes over the "social dumping" and "unfair competition" of the new members, the Central and East Europeans see that the only way to escape the communist legacy of poverty is a vibrant free market.”
Bull. The reality of politics in this part of the world is very different from the neo-liberal fantasy.
In last September’s general election in Poland only one party stood on a free market liberalizing program: Civic Platform. They got just 24% of the vote. That means 76% said 'No thanks" to economic liberalism. All the other parties, including the winner, Law and Justice, stood on a ticket that included a leftist economic program.
Law and Justice promise Poles that they will close the gap between rich and poor; have been resisting Brussels’s attempts to bring more cross border competition into the EU (see the Unicredito affair); have promised to keep current levels of social spending on welfare programs, etc, and ‘do something’ about Poland’s 18% unemployment rate; they also are wary of speeding up privatization and will be keeping ‘strategic industries’ within state control.
This type of social democratic/socialist economic policy is supported, more or less, by virtually every other political party, bar one.
It’s only Civic Platform, with its electoral base in the small middle class, that wants to liberalize markets, bring in a low flat-tax system and increase the pace of privatization.
And it’s much the same in the rest of Donald Rumsfeld’s ‘New Europe’.
People in this part of the world have had 15 years of economic ‘shock therapies’, have experienced rapid social and economic change, have encountered mass unemployment for the first time since the 1930’s and a widening of the gap between the haves and the have nots…and most of them just don’t like it.
The reality is this: a majority of people here are right wing, social conservatives but left wing economically. It’s a strange mix, but a very ‘New European’ one.
So sorry Cato Institute, but I think its time for your highly respected commentators to go back to the drawing board. New Europe is very much like the Old Europe, only poorer and more frightened.