Thursday, April 06, 2006

Neo-liberalism? No thanks

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.


sonia said...

Good analysis, Beatroot,

Except that sooner or later, Poles will realize that PiS's 'do something about Poland’s 18% unemployment rate' promises are just that - empty, demagogic promises, and they will turn towards the Civic Platform that, hopefully, will turn Poland into another Ireland - an economic powerhouse that shed the Catholic protectionism (both economic and moral) and turned into a neo-con's wet dream.

Because, eventually, people always realize that protectionism is ineffective and that real economic progress can only be realized by cutting taxes, cutting welfare and supporting small businesses. The money spend on social programs is always wasted. It's better to invest it. The same money (and much more of it) will get to the poor eventually, but not as a hand-out, but as a legitimately-gained salary.

beatroot said...

That's called the 'drip down' theory.

Poland needs a high growth and productivity economy before anything can drip anywhere. How to get it? Do you get it by pure freemarket? And how many poor are we to sacrifice?

Those are the real questions: don't know the answers.

The public sector is pretty awful. Full of morons. There is not just corruption here but, in the public sector, massive inefficiency and waste. I am not saying privatise everything, just try and get some proper managment in!

Frank Partisan said...

Small business is no panacea. A small business owner is threatened by working class demands, and threatened by big business competition.

I think the Bush legacy will bury trickle down forever. It died in the 1930s, but keeps getting resurrected. It's naive to believe the theory has any regard for the poor.

New Europe misses the safety blanket they once had.

beatroot said...

We still got lots of blamkets (thogh Red Cross parcels still welcome!)

Security system in lots of Europe is still magnificent. But not in Poland, where it never was. And that's crucial. If you are going to have a social system then you need enough people paying tax to fill it up and it to be spent on the right things. We pay loads of tax but it is not spent on the peple it should be, but on inefficient public companies that are crap.

beatroot said...

Estonia is small...that certainly helps...turning round a small boat is easier than a massive rusting ship, like Poland.

But the culture in Estonia is different to Poland's. They have an almost scandanavian attitude to technology. It's now one of the most wired up places in Europe.

Estonia and Slovenia are the success stories from this part of the world. Slovenia has now a higher standard of living than Portugal!

beatroot said...

The organic thing is very possible. Polish farms were so underfunded and inefficient that they didn't use modern the soil is cleanable much quicker than in western Europe. (though saying that, I think that organic farming is a blind alley, will use up much more land than intensive farming...I am a big GM crops fan - I never was very fashionable!).

Tesco's etc are already here and are providing lots of jobs, but are taking a kicking from the protectionist government, which sees foreign retail investment as 'unproductive'.

Building industry does do well here. But you are right about Poles working abroad will bring back with them more than just their dirty laundry. Money, but also a type of work experience that they can't get easily here.

The only problem is that all essential workers (like doctors) are packing up here and going abroad. If they don't come back then that is really serious.

michael farris said...

I suspect that Estonia is also almost Scandinavian in its approach to risk and new ideas (what the hey? let's give it a try!) whereas Poland is much more risk adverse and skeptical of anything new (unless already vouched for by a reliable source, like the US).

I'm pretty sure any Polish government will do its best to prevent anything like a boom (remittance or return tax for example), as that's not really in any of the major political parties' interest.

michael farris said...

"Money, but also a type of work experience that they can't get easily here."

Depends on what you mean. if you mean being treated fairly, chance to advance, then yeah.

If you mean working hard and being productive, that's possible in Poland too. Polish people work hard when they're paid well, but don't pay them crap and expect anything but crap work...

beatroot said...

george - next time you are here then drop by and we will put some extra demabnd into the drinks industry here!

I like this theory about a link between gays and technology...! It's a kind of 'pink zloty' theory!

Mike: good point about risk and Estonia. And that if you pay Poles well they work hard...

But there is a generational problem here too...many older workers (not all) carry the burdens of Poland's past working culture very heavily. They simply don;t understand how to sell advertising etc (they think advertisers come to them! Ringing up cold and tyring to sell space with a publication etc is seen not as selling but begging.

michael farris said...

The problem with Wolf Moon's idealistic picture is that IME young Poles (I teach at a university) are apolitical and could care less, they'd much rather complain than vote and have a bunch of half-formed ideas that do not serve them at all.

Try to talk to them about politics and you quickly get "I don't care", "they're all thieves" and "it's boring", attitudes which essentially _guarantee_ that the worst of the worst will win elections and mismanage the government.

I don't see the situation improving any time in the near future (ie 50 years or so). Go ahead, prove me wrong.

beatroot said...

Big beatroot welcome to Wolf Moon!

Mike: what is wrong with being idealistic? Like you say, young liberal Poles are very apathetic and individualistic. So a bit of idealism is welcome.

But Wolf. The reason why public life in Poland is crap is because of the old fools and those who want things to stay as they are as they are doing quite nicely out of it. It's crap because it doesn't have people like you in it.

But it doesn't havw to be like that. The Polish political class is not like a force of nature, like a hurricane. If enough of you wanted to change it, you would.

beatroot said...

Great comments everyone.

michael farris said...

Yes, Wolf Moon is on the side of the angels here, I'm happy to see some idealism. But I think most young people (including Moon) at present think of idealism as something to be invested elsewhere, and not in Poland. That doesn't help much.

And Polish .... individualistic? I can think of few words I'd be less likely to use to describe them. Conformist borderline anarchists with an entitlement complex would be closer (not that there's anything wrong with that, it's that kind of culture).

beatroot said...

Conformist borderline anarchists with an entitlement complex ;-) Oh yearh.

But what's an 'entitlement complex'?

michael farris said...

sample conversation between M and Student on a written assignment, the topic is 'should students pay for their studies'.

S: Students shouldn't have to pay for studies.
M: But there's not much money in the education budget at present.
S: They (the government) should increase the budget.
M: So who do you want to take money from? Old people? Medical care?
S: No, they should just find more money.
M: So you think taxes should be increased?
S: No.
M: Then where will this money for education come from?
S: I'm not interested in that.

beatroot said...

I see. But it is a good question, sin't it? Should they have to pay for education? I think turns education into a commodity that you kielbasa. And in that case, what's wrong with cheating to get a degree?

Entitlement culture indeed...

michael farris said...

I'm not convinced entirely one way or another. The good thing about paying (even nominally) is that then they're _clients_.

At my university day students and weekend students are treated very differently. Basically, if the weekend students are upset about something and complain then it changes relatively quickly. The complaints of day students go mostly unremarked upon. (And administrating a successful weekend program is a new way to get ahead for younger scholar/adminsitrators.

beatroot said...

It was exactly the same thing at Warsaw University. The day students - who passed the entrance exam - didn't even get individual photocopies! But the evening and weekend students (who did not pass anything except some money over the counter) got individual copies, and probably a massage and sauna after class....

Shurly shonething wrong there...?

Anonymous said...

Going back to the notion of "New Europe", being a Swede living in Warsaw at the moment, I definitely think that the term could carry some usefull meaning, but beyond and beside Rumsfeld's version of the idea. This industriousness of Poles, who wants a good life for themselves and their children, contrasts against the situation in "old" Sweden, where the marginal benefit of yet another plasma-TV seems not big enough to work hard for. But being willing to work hard does not necessarily imply a neo-liberal stance, even if the liberal-conservative parties in for instance Sweden have hijacked the work ethics, and more importantly the social democrats have let them do so.

About R. Florida, gentrification and pink zloty: The Warsaw club Le Madame, which was recently closed by the PiS controlled town hall, would be a textbook example of how the creative class can create assets for a developing city. But I don't think Kaczka is reading Florida, for some reason...

beatroot said...

Where to start?

First, welcome Gabriel! Who, with Swedish eficiency, has got back to the point! :-)

Have you noticed that more and more now, Poland is being refered to as 'Central Europe'? That's a big step forward from "New Europe' - Poland is 1000 years old! Now the country draws a line between it and Eastern Europe - Ukraine, Belarus...

George (I think he went to Cambridge, readers) ... when you went to university was when I went to university, I think. Yup, what a change there is now. I could not work in a British university now. They have become like further education colleges...full of conformist (in all their 'diversity' of conformism) chasing bits of paper with 'qualifications' written on it. Plagiarism is rampant (Polish students will give them lots of tips) and nobody wants to work hard, because education means nothing except a path to work. I learn work skills in the first two years of where I work. Education is for opening students minds, not preparing them for work...

rant over...

beatroot said...

Yep, foreign students are the answer to colleges' prayers right now. In the old days at LSE this was a positive...British students learnt lots from them...but now? You pays your money and you gets ya degree.

and its all the fault of the thinking that education has something to do directly with the job market. What educators have to do in Britain and Poland, in my opinion, is to try and re-emphasise that education is about intellectually challenging students, by introducing them to new ideas, make them realise that there is a world outside their experience.

But that goes against an education that is meant to be 'inclusive' ' accessable' 'relevant'.

How can abstract thinking be any of those things?

I read an interview with Nick Hornby (an ex teacher who had a very good education at a public school) saying that teaching Shakespeare was a waste of time because the 'kids just can't understand the language'.

How mich more patronising can you get?

Dumming down?

michael farris said...

"I read an interview with Nick Hornby saying that teaching Shakespeare was a waste of time because the 'kids just can't understand the language'."

Hey, I couldn't (and can't) understand Shakespeare unless there are lots of crib notes (referring to which kind of kills the momentum of reading).

I'm all in favor of 'translating' Shakespeare into something comprehensible, not dumbing down, but making comprehensible for an educated modern reader (as recommended by the linguist John McWhorter).

I'd gladly give up:
Revenge, affirm, and turn their halcyon beaks
With every gall and vary of their masters,
Knowing nought, like dogs, but following.
A plague upon your epileptic visage!
Smile you my speeches, as I were a fool?
Goose, if I had you upon Sarum plain,
I'ld drive ye cackling home to Camelot.


Deny, affirm and turn like weather wanes
With every gust and shifting of their masters,
Like dogs, know nothing, but to follow.
A plague upon your snide, misshapen grimace!
Smile at my speech, as if I am a jester?
Goose, if you had a swamp in which to swim,
I'd drive you cackling home to shiver in it

beatroot said...

Maybe King Lear?

And the most beautiful writing that has ever been on this blog!

two points about shaggespear.

a) he is difficult! It makes the little creeps work!

b) Shagspear, like all great artists, speaks to humans in a universal way - across time, across cultures…

Fuck diversity…Lets teach them about what we have in common – and in a way that forces them to think!

Anonymous said...

Thanks! Surprisingly civilised and thoughtful comments for a blog with political topics, I must say...

Apropos "Central Europe": When I casually refered to Poland as a part of Central Europe, my Polish teacher, who is also a political scientist, told me, with a smile, "That is Czech ideology". So I guess the notion of Central Europe primarily applies to countries and regions sharing a Habsburg (Austro-Hungarian) legacy. Which leaves out most of Poland except Cracow and the Tatras. Poland has strong historical ties with Lithuania and Belarus of course, and the part of Ukraine that was once Polish (but Lwow was also once Austrian Lemberg, that's part of why it is west-leaning) so they might not see Prague (instead of old Vienna) as the center of the continent.

But in a wider sense, I must ad, Poland is definitely a part of the Mitteleuropa I love.

beatroot said...

Faor me, Central Europe is different from eastern Europe in that: central European countries use roman letters and not the Greek. They are mainly catholic and not Orthodox, and more recently, were not part of the Soviet Union but its one of its satalites....

Anonymous said...

Yes, many points there. And Lonely Planet includes Poland in Central Europe... As do Wikipedia. But my point was that Poland might be looking eastwards to embrace Belarus into Europe instead of betting too much on the Visegrad group. (Former Habsburg countries Czech Republic, Slovakia, Hungary, and Poland, bypassing old ruling Austria...)

But on second thought, maybe one should include the mainland of the old Polish-Lithuanian commonwealth in Central Europe, and draw the line with the Catholic border. (The Belarusians were allowed to keep the allegiance to the Pope, but with Orthodox liturgy) But that way we should include Croatia too, which does not by any means consider itself Balkan, as far as I know that is. But they are mediterranian... Tell me if I bore you with all this history...

beatroot said...

Lithuania is a 'baltic state' - yet another catagory...

and you are right about belarus. Right wing governments here have a 'face east' policy, where they pay far more care to developing diplomatic ties with Ukraine etc...whereas the more left leaning governments try and cement Poland's position in the West.

beatroot said...

Outer mongolia. But that's a good poont. Only problem is, every Pole not from Krakow thinks the city is full of snobs. It has got that 'Austrian flavour'...ladies sitting in cafes talking about 'culchure'.

michael farris said...

"Only problem is, every Pole not from Krakow thinks the city is full of snobs."

Maybe in Warsaw, IME people in Poznań have a very positive attitude toward Kraków and reasonably positive toward the people (as positive as Poles ever are toward each other, which is not very). Maybe the Prussian remnants admire the greater Austrian style.

OTOH Poznanians _hate_ Warsaw and the people as layabouts who inherited the Russian appetite for things that don't belong to them.

The issues of Polish cities that are friendly with each other, unfriendly toward each other or oblivious to each other is a separate, though fascinating, topic.

Anonymous said...

Getting more and more interesting, yes. The borders of the regions of Europe are utterly blurred, and one other conclusion (there should always be a conclusion, like on BBC...) is that for the young generation, these borders matter less and less. They (or we, I am still pretty young...) drink the same vodka, send sms:s on the same cell phones... Everyone is just the same Eurotrash bohemian like you. Whether you are from Sofia or Amsterdam, Lisboa or Vilnius.

But of course, in the East this applies first and foremost to urbanised countries of small to moderate size. And leaves out vast areas of rural Poland, I suppose.

beatroot said...

Vast areas.

It was the idea of the EU to break down the barriers etc...but as they have found out to their cost, you cannot manufactor an 'identity' from the inside of an office somewhere in Brussels.

beatroot said...

No Starbuck's in Warsaw yet!

michael farris said...

To be a little more realistic. Young Europeans of certain social classes and inclinations have a lot of popular consumer culture in common.

But the other kind of culture (what anthropologists and sociologists look at) isn't changing. Young Poles may dress, listen to music etc like young Danes or Italians, but they still have fundamentally Polish attitudes toward authority, their families, life ambitions and the future. And these still signficantly differ from those of their age peers in Sweden or Portugal.

Poland might not have Starbucks yet, but it does have Starbuckish kinds of places.

Anonymous said...

Poland has Coffee Heaven. I am at their place at Nowy Swiat right now. They mark Zagreb, Ljubljana, Kiev et. al. as "Future considered" and Bucharest and Sofia as "Marked entered" on their sub-continent domination map.

Anyway, you are all right in that is yet a phenomenon of the urbane areas and certain groups etc. But the change is coming. Poland is run by the old guys today - the young ones are biding their time. But the times they are a-changin'.

Anonymous said...

Speaking of New Europe (back to the topic) I just have to cite aforementioned companys "compelling concept":

coffeeheaven is about spending quality time in the dynamic heartland of ‘new’ Europe. It's about people enjoying life - talking, meeting, eating and drinking in a stylish, contemporary café setting. Choice and quality of coffee and food is outstanding. Our service is swift, friendly and always cheerful.

Taking time out at a coffeeheaven in Central Europe will feel as familiar and relaxed as a café in London, Paris or Rome...The coffeeheaven concept combines the best of two converging worlds: Western experience with ‘new’ Europe’s aspirations, talent and youth.

beatroot said...

I love their 'coffee heaven' concept!

What fucking 'concept'? It's only a coffee bar, for Christ's sake. What do the brand managers of these places think they are - Mother Theresa?

"Waiter! Can I have a cafe lato with extra poor people please?"

beatroot said...

Yeah, the Austrian part (Poland was colonised by three different Empires - Austria, Russia, Prussia, if people don't know what we are talking about) has that oldy central European charm. The old Krakow coffee houses are much preferable to the American style places, in my humble opinion (although they do not have internet hop spots!).