Poland Takes the Plunge

...For one thing, many people can't afford to buy blankets...

...Which is to say that the price of paper in Poland has already achieved world levels, such that on any given day paper might be procured for a slightly cheaper price in Finland or West Germany or wherever...

...You know the story...

...Ach, and I had so many more solutions.' ") Well, a month has now passed since the plan kicked in, the experiment is truly on, and Poland is indeed hurtling...

...They assured their countrymen, however, that the moment they leapt, water would start flooding in—that it wouldn't start flooding in until they did leap, that in effect it would be the leap itself that would provoke the flooding, but that there would be just enough water in the pool by the time they reached the surface to cushion their fall...

...People used to grab up every available copy of Gazeta as soon as it hit the stands each morning...

...Ironically, this last factor, seen in another light, prefigured terrible problems for Poland's economic renewal...

...That was the experiment...

...The workers bade her an angry no-thanks, but next time they may not be able to be so choosy...

...In the past they'd charged their customers the equivalent of two cents a copy—already a steep price—but now the physical paper by itself was costing that much, and they were probably going to have to double their price to the equivalent of at least four cents a copy, this at a time when their customers were being whipsawed by all sorts of SPRING • 1990 • 209 Poland other real-price increases...

...That was the idea...

...This has had certain good effects...

...The next day the guy comes back and says, 'Rabbi, I did exactly what you said, every single detail, and Rabbi, they're all dead.' The rabbi is flabbergasted: `All of them?' he stammers...

...That was the wager...

...Indeed, several of Solidarity's leaders happened to be in the United States at the time (as part of the delegation accompanying Lech Walesa on his spectacular tour), and one evening I got a chance to show one of them a clipping from the New York Times detailing these latest developments in Bolivia...

...And it's also because the Poles throughout this period have sensed themselves at the forefront of a truly astonishing and worldhistorical region-wide transformation: their own perilous circumstances seemed somehow easier to bear within the context of all the exhilarating things that were simultaneously happening elsewhere in Eastern Europe...

...The stores in Warsaw are filling up with supplies and foodstuffs, but at such astounding prices that they often go begging for buyers...

...Now, there's a pile of blankets at the store, but they're so expensive you think twice, three, five times before buying even one...

...The crash plan Solidarity would be attempting to force through in the first weeks of 1990 was a variation on one first proposed last summer by Jeffrey Sachs, a brilliant young Harvard economist who first introduced himself to Solidarity's parliamentarians as, among other things, the man who a few years ago helped bring an end to Bolivia's horrendous hyperinflation, virtually overnight, through the application of a similar sort of radical action plan—combining sudden cutbacks in government subsidies, a balanced budget, stabilization of the currency, privatization of governmentowned monopolies (and, incidentally, suspension of payment on the foreign debt, a twist that has hardly endeared Sachs to Western bankers...

...Because now Poland would have to be competing with all those other places for Western assistance and investments...

...Actually, however, Poland was indeed about to revert to being an object once again—this time, the object of a grand economic experiment...

...Get rid of those deformations immediately, it was argued, and while it was true that coal would suddenly cost the same in Poland as it did in West Germany and Polish salaries would not have risen anywhere near enough to make up the difference—still, it could be hoped that the new economic conditions would foster a sudden upsurge in entrepreneurial spirit, both domestic and foreign, and that within a few months, in the nick of time, salaries would start rising fast enough to make it possible for people to live...

...She told me how they'd now taken to buying their paper in Finland...

...The latter make the former possible...

...A more perverse side effect is beginning to make itself felt in Polish agriculture...

...And it's not at all clear that water as yet is pouring in...

...certainly it will be for many people...

...From now on, the Poles had taken to telling their COMECON trading partners, no more barter, no more soft currency transactions: from now on, hard cash on the barrelhead...

...I say this not out of ideological petulance...

...The price explosion has been every bit as staggering as everyone had feared, and morbid symptoms are appearing everywhere...

...212 • DISSENT...

...This contention in particular proved especially controversial: many felt that Poland's hemorrhaging economy wouldn't be able to withstand the shock...

...The Triumph of Capitalism...

...It might even be better to be Mexico than to be Poland mired in continuing "real socialist" stagnation...

...He reminded me that even when he'd first proposed his Bolivian plan, he'd told the Bolivians that they lived in an appallingly poor, atrociously unlucky country, one that was further afflicted by hyperinflation, and that all he could promise them was that after they'd instituted his plan, they'd live in an appallingly poor, atrociously unlucky country, one no longer afflicted by hyperinflation...

...Oh, dear," the man's face darkened...

...Something drastic clearly had to be done, and classic communistic central planning, as it had been practiced everywhere in Eastern Europe over the past forty years, had proved itself utterly incapable of facing the challenge...

...But this also has a myriad of harrowing effects...

...What will become of that romance...

...It looks like many of them will now be efficiently collectivized by capitalism...

...Over and over again, they took to explaining how they felt they had to go with the one system that had been tested and proven, and that was the wide-open free market...

...And, indeed, it is one of the most perplexing ironies of Polish society's recent triumph that that victory may now be opening onto a new atomization, a new objectification...

...Chicken farmer goes to the rabbi and says, 'Rabbi, Rabbi, my chickens are all sick,' and the rabbi says, no problem, just do such and such...

...And now, what the police used to forbid is forbidden by price...

...Rather, the question the Poles should be asking themselves at this juncture is what role international capitalism has in mind for them...

...In fairness, I called Sachs a few days later to ask him what had happened...

...The experiment, at any rate, is on: Poland is plummeting toward the pool's blank surface...

...Normal," in this sense, means something 210 • DISSENT Poland altogether different from "normalized," which, as will be recalled, was the endlessly fugitive goal of martial law: the authorities' vain hope that they might somehow normalize the situation of the country, that is, bring it back to its previous pristine abnormality...

...Solidarity's leaders could not have been much heartened, however, by news emerging from Bolivia in mid-November to the effect that that country's center-left government, responding to the growing labor unrest that their version of the plan had in the meantime engendered, ended up having to declare a state of siege, incarcerating over three thousand labor leaders...

...Those deformations, however, were all but crippling the possibility of profitability for any indigenous entrepreneurs, let alone for foreign investors...

...But that's okay: maybe that's how a normal market should work...

...It was also in part because the government had been fairly lucky, especially with regard to the weather—the winter was proving unusually mild, so that Poles were managing to avoid the full brunt of the coal price increases...

...If, starting in 1980, Poland recovered her subjectivity, it was precisely through the astonishing transformation made possible when ten million atomized objects began surging as one, demanding as such to be taken into account, indeed to be the ones doing the accounting...

...Trust them...

...He then asked if he could keep the clipping...

...Pomerania, meet Kansas...

...But really," Halina Bortnowska, the Solidarity theorist who coined the subject-object distinction almost a decade ago, told me last summer as these ideas were just starting to be bandied about, "we're not laboratory rats here, and really we've had enough of grand experiments...

...Thousands of private farmers—whose stubborn, valiant resistance to communist collectivization had been one of the distinctive hallmarks of the Polish postwar experience—now stood to lose the small plots their ancestors tilled for generations...

...Still, the Mazowiecki government was retaining an uncanny degree of public support as it entered the second month of its crash program...

...That grammatical formulation in turn helps to clarify what General Jaruzelski and his colleagues were up to with their imposition of martial law, back in December 1981—they were trying to turn all those pesky renascent subjects back into good little objects once again, just so many passive bricks ready for slotting back into The Wall...

...If anything, he went on, their luck had proved even more appalling during the last few years than ever before...

...The drama of much of Polish history during the rest of the decade came to reside in the contest between those two opposed ambitions: the regime's FEBRUARY, 1990 relentless repression and civil society's stubborn resistance...

...There is no doubt that some Poles will do well under the new system— perhaps many Poles will...

...So that even though the Polish pool has been receiving sudden emergency infusions of hard currency from the International Monetary Fund and the U.S...

...As a result, ironically, by the end of last year Solidarity's leaders were about to launch the country into perhaps the most harrowing macroeconomic experiment ever attempted by anyone—a virtually immediate, wholesale shock transition from a centrally planned economy to a vigorously open market...

...At that moment, late in 1989, while it was true that the average wage in Poland was the equivalent of about $25 a month, it was also true that subsidies and various currency deformations resulted in the availability of such things as energy, housing, transportation, and food staples, for zloties (granted, often at the end of long lines), for a fraction of their Western cost...

...Sure, we'll have problems," one fellow had told me back during the summer, "unemployment, factory closings, steep prices and so forth...

...What little water might have been expected to pour into the pool was suddenly being diverted elsewhere—to more promising short-term venues (such as Hungary and Czechoslovakia...

...Eventually farmers were forced to lower their prices, but this in turn put them in a terrible squeeze, since prices for their fertilizers and tractor rentals and so forth had in the meantime skyrocketed as well...

...This was in part perhaps because the worst effects of the program had yet to be seen (because of the way Poles actually get paid, they may not be able actually to gauge the full extent of the collapse in their living standards until they try to make late January's paycheck last them through February...

...The outcome of the entire experiment is still very much up in the air...

...All of them...

...At each of his presentations to Solidarity's leaders and legislative caucus, Sachs made a big point of insisting that the projected transition had to be sudden, abrupt, and almost immediate...

...Poles, like most Eastern Europeans, have long lived under the delusion that the Soviets were simply bleeding them dry: in fact, the situation has been considerably more complex than that...

...A skeptical columnist subsequently averred as to how Sachs was proposing to cut the tail of the Polish economy off at the neck...

...I was reminded of something Eduardo Galeano told me a few years ago in a then just recently redemocratizing Montevideo...

...it had caused the challenge...

...During the season of its first flowering, at the outset of this decade, Halina Bortnowska, one of the foremost theorists of Polish Solidarity, characterized the movement as an expression of the country's "subjectivity," by which, she went on to explain, she meant Poland's renewed capacity for acting "as the subject instead of the object of its history...

...It was in large part because Poles had been claiming all along that they'd be willing to endure terrible sacrifices if only they sensed they were moving toward greater freedom, and even in the face of these considerable hardships, they remained convinced that Mazowiecki and his colleagues were indeed leading them toward a more normal existence...

...Even the plan's proponents in Poland admitted as much...

...The zloty was plummeting in value, the country sat poised on the verge of a terrifying hyperinflation...

...The shipbuilders in Gdansk, for example, would no longer accept payment in worthless rubles (payment which over the years had decimated the financial integrity of their enterprise)— from now on they wanted the Soviets to pay them in dollars or marks...

...Still, Solidarity's government, now led by finance minister Balcerowicz, continued refining its plan for a definitive shock transition, to be undertaken at year's end...

...Gradualism wouldn't do...

...But those will be the normal problems of normal countries—instead of all these absurd, crazy-making problems that have characterized our lives up till now...

...And that's in the "successful" capitalisms —Reagan's America, Thatcher's Britain...

...In capitalism, only the wealthy get to be subjects...

...And real capitalism—as a world system—consists not just of Germany and Sweden and Japan and the boutiques along Madison Avenue...

...Things were done to her, not by her...

...If I choose to focus on Poland in these remarks, it is in part because I know Poland best, and in part because Poland is out in front, leading the other East European countries, encountering the difficult and perplexing ironies of victory first...

...Guy comes back the next day and says, 'Rabbi, I did exactly like what you said, and, Rabbi, two of the chickens died!' Oh, says the rabbi, in that case you'd better do this and that...

...It is one of the ironies of our age that capitalism appears to be "triumphing" almost everywhere in the world at the very moment when most of those living under its purview are witnessing, for the first time in several generations, a distinct shrinkage in their own standards of living...

...Beyond that, another possible source of "water" was becoming increasingly problematic...

...it also consists of Mexico and Brazil and the Philippines and the homeless along Madison Avenue...

...In part this transformation was one of desperation—the economic situation, already dire at the outset of the last decade, had been rendered all the more calamitous by the hapless paralysis of the ensuing several years...

...I want to be able to show it to Prime Minister Mazowiecki," he chuckled grimly, "so he'll know what to do when we get to that stage of the plan...

...But Poland was different, Sachs assured me, Poland had possibilities—if only it could move quickly to stabilize its economy, as difficult as 208 • DISSENT Poland that process might initially be...

...Some are getting much richer, but the middle class is being whittled away, and the poor are falling ever farther behind...

...While Solidarity, in its first flower, was a decidedly egalitarian phenomenon—its very name tapped into a century-old reservoir of socialist rhetoric, reclaiming it as its own, demanding in fact that it be made real—the Solidarity that emerged from the half decade of repression was much less selfless, much less communitarian, much more individualistic, much more in thrall to the romance of the free market...

...The trouble is, the distribution of wealth across society will become more and more polarized, and many Poles will fall ever farther behind...

...The question that came to mind, of course, was: Is . . . there . . . any . . . water . . . in the pool...

...But I just end up wondering how concerned Western media are going to be, five years down the line, about the plight of Polish workers laboring, for example, in German plants in Gdynia or British-owned factories in Lodz, or for indigenous millionaires in Wroclaw and Poznan...

...the old model was SPRING • 1990 207 Poland obviously bankrupt...

...Poles will have to buy Soviet oil and natural gas (or else, somebody else's oil and natural gas, at the same world price), but it isn't at all obvious that the Soviets will feel compelled to buy often second-rate Polish goods at hard-currency prices...

...Assuming the experiment works, a great deal more wealth will be generated (the old system, in any case, proved woefully incapable of generating any wealth whatsoever...

...In the old days," he said, "if you saw a line you automatically got in it, no matter what they were selling, and when you got to the front you'd buy the maximum number of units—say, three blankets per customer— whether you needed them or not: you never knew when they'd show up on the market again...

...Well," he said, "they're inching their way closer and closer to the edge of the diving board, and their knees are trembling...

...In the old days Uruguayans bought five or six times as many books as they do today," he said...

...At one point, Sachs recalled how Bolivia's finance minister had commented to him that when cutting the tail off a cat, it was best to do so in one fell swoop, rather than through a series of tiny nicks...

...Thus, for example, one of my informants told me that now people only buy what they absolutely need...

...Are they going to be Sweden (as they so fondly imagine, as they are being invited to imagine), or are they going to be Mexico (a continuous source of cheap labor for the emerging Western European powerhouse, a handy threat that its capitalists will be able to use whenever they need to bludgeon their own uppity workers back into line— "Watch out, because we can always just pick up and move our operations to Poland...

...The point about this specific experiment in any case—even assuming it does work—is that it is requiring that the Poles abandon their earlier solidarity, that they start behaving as atomized, ruthlessly self-interested freemarketeers: each workplace squared off against the next, each individual squared off against his neighbor, as little government intervention as possible— survival of the fittest...

...Congress and the Europeans and the Japanese—and even though a certain amount of indigenous entrepreneurial spirit is indeed kicking in—still, the economy has simultaneously sprung a series of distressing leaks and it is not at all clear, still, what will be awaiting the Poles as they complete their dive...

...That's how people survived...

...Thus, for example, as quickly as possible, Poland was intending to create a stable currency at a unified rate...

...It turned out the price she was willing to offer for the physical plant was ludicrously low, she was only going to be offering the workers fifty cents an hour, and she was requiring that they pledge not to strike for at least five years...

...There may, if necessary, be fresh ways of battling out of the terrible contradictions of Third World—style polarization and exploitation—and if there are, the remarkable Poles, if anyone, show promise of finding their way clear to them...

...Meanwhile, Solidarity's onetime socialist theoreticians no longer felt they could afford to experiment with such unproven approaches as worker self-management or decentralized community control...

...And curiously, the Soviets seemed willing to go along with this demand...

...Next day, the guy comes back and five of them have died...

...But in exactly the same way as one should consider the operations of "real existing socialism," one ought to consider those of "real existing capitalism...

...Even the optimists were anticipating at least momentary dislocations for upward of 30 percent of the country's workforce, as inefficient, once heavily subsidized industrial behemoths were forced to shut down: the optimists insisted that most of those suddenly unemployed would quickly find other, more sensible and more productive, work...

...During the past several years it has become fashionable to speak of "real existing socialism" — socialism as it really came to be lived in the world as opposed to how it was supposed to be lived in some idealized simulacrum...

...Muscovites always lived poorer lives than Varsovians...

...The Soviet dominion was in fact that unique historical perversity, an empire in which the center bled itself for the sake of its colonies, or rather, for the sake of tranquility in those colonies...

...Next day the guy comes back and eleven of them have died, so the rabbi offers yet another variation...

...And how, I asked him, did things seem to be going over there in that regard...

...Rabbi says, oh, in that case you'd better do this that and the other...

...The pessimists weren't so sure: they anticipated an explosion of worker unrest, the sort of thing they're seeing over in Bolivia these days...

...Almost continuously for the past two centuries, and certainly throughout the last two generations, Poland, tragically wedged as it was between the German and Russian dynamos, had been forced to receive the actions of other people's sentences, hardly ever being allowed to initiate any of her own...

...Really," another theorist commented to me, "economists are too much to the fore these days...

...One of the more notable developments of January, in fact, was the collapse of the biggest projected capitalist joint venture of them all: Barbara Johnson's impromptu scheme to buy up the Lenin Shipyard in Gdansk...

...The distinction was a fertile one—and perhaps most evocative at a purely grammatical level...

...Fine, they were saying, and you pay us in hard currency, at world rates, for all the oil and natural gas we export to you...

...Then came the national security dictatorship with its pervasive censorship...

...And the answer, frankly, was that no, there was none, at least not at the moment...

...As for the Third World, go ask Brazil or the SPRING • 1990 • 211 Poland Philippines or Mexico about the Triumph of Capitalism...

...now they hesitated and dallied and often demurred: print runs were already down from 550,000 to 375,000...

...Everybody was doing this and the market was thus completely distorted: of course they immediately ran out of blankets, so the behavior was self-perpetuating...

...It's like the rabbi and the chicken farmer...

...Prices for food initially went up so spectacularly that many people simply stopped buying: hams, for example, rotted for lack of customers...

...The other day I was talking by phone with one of the editors at Gazeta Wyborcza, Solidarity's trailblazing daily, the first such "oppositionist" daily anywhere in Eastern Europe...