Labor in Eastern Europe

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...Its leaders, like the government's—too often the same people—argued that "there is no other way...

...Now that they had control, they still had to gain legitimacy...

...If any worker-friendly "capitalism with a human face" were possible, surely it would take shape here, under the watchful eyes of the electrician-president...

...In Hungary, labor was divided between unions loyal to the ex-Communists and unions allied with the liberal opposition...

...And yet unions have been in dramatic decline throughout the region...

...But this is not what Solidarity did...

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...When Czech voters turned away from Klaus's Civic Democratic party in the June 1996 elections, they did not embrace the ex-Communists, as in Poland or Hungary, but turned instead to authentic reformist social democrats...

...Culpable communism: Being considered the "leading class" in the communist era is a distinct disadvantage in the capitalist one...

...But liberals assigned workers little role in the transition except to sacrifice on behalf of a "greater good" that conspicuously left them out...

...Better for labor to be a negotiator in the transition than a too-willing accomplice...

...Cooperation between government and unions made this possible...

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...Poland and Czechoslovakia If all the countries in the region had gone through an identical process, we could embrace both of these perspectives and just say labor is doomed...

...Workers have drifted to the right because liberals pushed them there...

...The arrangement consisted of many pieces, such as a devaluation of the crown, union acceptance of low real wages, and flexible bankruptcy rules...

...There were no independent unions, after all, to articulate what labor really wanted...

...Please use inclusive language so that we don't have to make adjustments during editing...

...In Poland, labor was firmly behind the market reformers...

...Czech unemployment has hovered at about 3 percent to 4 percent, compared to about 15 percent in Poland and Hungary (in rural provinces, often much worse...

...He plays to the same themes as Wrzodak, though without the aggressiveness or open bigotry...

...But Czech unions had watched as real wages plummeted by a similar amount in Poland in 1990 together with a dramatic increase in unemployment...

...It conjures up images of old men in badly tailored suits...

...What were unions to do in the new epoch...

...Wrzodak combines populist, Proudhonian faith in small enterprise owned by workers with a conviction about the need for a strong state run on Christian principles to protect "the nation" against its enemies...

...Solidarity president Marian Krzaklewski has criticized Wrzodak as extreme, even "proto-fascist...

...Instead of simply sanctioning a reform package, as in Poland, it helped create one...

...And the enemies (again defined as "aliens") are all over the place: they are the communists, capitalists, Russians, Americans, Europeans, foreigners, and Jews...

...With the press still in the hands of the party, the actual organizing of the strike had to be done by hundreds of individual activists, including young workers drawn to militance by the intoxicating new images of freedom, as well as savvy older union officials bent on survival, realizing that the moment to recreate themselves was at hand...

...Solidarity has moved to the right because its erstwhile liberal and democratic socialist allies have pushed it there...

...With no promarket legacy to fall back on, and with hard-line communists (who had formed a rival union) pressing from the outside, CSKOS had to define itself by its efforts to protect workers against the coming of the market...

...Union acceptance of declining real wages (27 percent in 1991 alone) is not normally seen as a gain for employees...

...The dissident intellectual organization Civic Forum had emerged as the dominant new force, and although the strikers assisted the Civic Forum activists, no labor representatives entered the hallowed body themselves...

...If labor seemed poised to defend its interests in Poland, it seemed doomed to take a beating in the Czech lands...

...The government's fear of inflation combined with unionists' fear of unemployment led to an arrangement in which both sides were able to claim victory...

...On specifically union issues, Solidarity has some interesting ideas...

...So insistent were the liberal intellectuals (former Solidarity ideologues) that shock therapy was mandated by "freedom," "democracy," "reason," and other good things that now 26 • DISSENT Politics Abroad the only way many unionists can think their way out of liberal economics is to think their way out of liberal politics too...

...In Poland, Solidarity fell from 9.5 million in 1981 to 2.5 million in 1990 and 1.3 million today...

...In the summer, both Solidarity '80 and the old "official" union (OPZZ) organized a series of strikes demanding higher pay, an end to the crippling wage tax, and more role for workers in deciding economic policy...

...In this way, the postcommunist era was ushered in with unions virtually invisible...

...The union needed to consolidate its position among its members precisely at the moment when fundamental discussions about the new economy were taking place, and when the new government needed legitimacy as much as the unions did...

...New jobs often lack basic health and safety protections, and are frequently outside the legal economy altogether...

...For it's not as if everyone's been hard hit by the collapse of communism...

...And it is better understood as the treachery of the intellectuals than the irrationalism of the masses...

...In other words, at the moment when it was finally free, Solidarity stopped acting as a trade union...

...Yet even Krzaklewski sees himself as squarely on the political right, and he has recently organized a broad "right-wing" coalition for the 1997 parliamentary elections...

...When Civic Forum, not surprisingly, emerged with a fiercely 22 • DISSENT Politics Abroad neoliberal ideology, Czech labor seemed doomed to marginalization...

...Even more ominous is that in the fastgrowing private sphere, the tendency is toward no unions at all...

...As Maciej Jankowski, leader of Warsaw Solidarity, recently said, "Solidarity is still not a normal trade union...

...Disdaining the prosaic nature of contract talks, it focuses exclusively on big issues...

...Devaluation and low real wages helped keep inflation down, but they also helped keep unemployment down...

...The Legacy of Labor Anti-Communism This comparison shows that there was no single economic logic demanding the marginalization of labor...

...The most extreme representative of this new tendency in Solidarity is Zygmunt Wrzodak, from the powerful Ursus Tractor Plant in Warsaw...

...In fact, however, the specifics of each country tell a different story...

...Buying into a painful economic reform package may well have been wise, since the economy obviously had to undergo a difficult transformation...

...The first to move in that direction was the Solidarity leader in Szczecin, Marian Jurczyk, who broke off in 1989 to form his own union, provocatively called Solidarity '80...

...It calls for a reversal of the privatization process (described as booty for nomenklatura thieves) and the introduction of a program of "universal ownership," whereby workers would receive, one-time only, a voucher worth several thousand dollars to invest where they choose...

...Prime Minister Klaus backed down...

...Solidarity stood at a crossroads: either join the discontented and break with the government or risk marginalization itself...

...That process began in November 1989...

...Labor also gained here by the government's bankruptcy policy, which reduced the fear of unemployment in privatized firms...

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...Solidarity even gave away other sources of employee power when it agreed to the abolition of employee councils in firms moving away from state ownership...

...When the communist system toppled only weeks after the strike had ended, this motley group of November activists positioned themselves to be the new union leaders...

...In Hungary and the former Czechoslovakia, union membership has also declined considerably...

...But things did not turn out that way...

...The Czech Republic's unpreparedness for marketization helped labor by forcing the government to turn to it for support...

...The early fears of foreign investors that Poland would be too friendly to labor seemed eminently justified...

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...When today's government shut the shipyard, as was announced in June 1996, liberals spoke of"market rationality" and threw the blame on Soliclarity...

...It also confirms the view that the only way for labor to win its rights is to fight for them...

...Czech unions won early representation on a prominent nationwide Tripartite Council, something denied Polish unions until 1994, after the pattern of neglect had been established...

...When the last communist government in 1989 tried to shut the Gdansk Shipyard, intellectuals denounced the move as treachery...

...Unions are relatively easy to form in Eastern Europe, and in most firms more than one union exists...

...Union leaders came out on record against the revival of a strong Solidarity, embracing the neoliberal view of unions as an obstacle to reform and thus bad even for workers in the long run...

...And Solidarity the trade union did nothing...

...For even if workers thereby get some capital, they would still be workers, and Solidarity's proposal does nothing at all to address problems of low wages, tenuous or nonexistent contracts, unemployment, or unsafe working conditions...

...Although the hard-line left and right did gather about 20 percent of the total vote, suggesting increasing anger as hardships continue, organized labor remains firmly behind the committed democratic parties...

...Mitchell Orenstein notes, "Low real wages .. . reduced the social costs of the transformation by keeping marginal laborers employed, while an undervalued crown kept marginal exporters in business, allowing them to employ more labor...

...Educated professionals and the old communist nomenklatura have so far been the chief beneficiaries of the "transition to democracy," and they have risen on the backs of workers they now care little about...

...For the new government to convince them it was, it had to make concessions unnecessary in Poland...

...THE EDITORS WINTER • 1997 • 27...

...No independent workers' movement had developed there even in 1968, during the Prague Spring, so it was no surprise that the 1980s also passed without labor activism...

...As workers' institutions, mandatory under the old regime, unions have become suspect...

...Although mobilized to militance by the economic crisis, Solidarity is so tied to its anticommunist past that it has not been able to give up faith in communism's putative enemy, the market...

...As recent Yale Ph.D...

...It is quite easy to attack Solidarity's right-wing turn...

...CSKOS first gave notice of its influence in November 1990, when it called a national strike alert to protest government plans outlawing political strikes and denying unions a say in dismissals...

...as the names of government leaders (none of whom were Jewish), were read from the podium...

...In a "real" market economy, says Solidarity, workers are treated fairly and are rewarded for their work, whereas Polish elites, who are not "real Poles," are rewarded for their connections...

...Yet this proposal shows the same fundamental problem mentioned earlier: a reluctance to think of union members as "workers" rather than "citizens...

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...One would expect trade unions to grow during a time like this...

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...Czech property, on the other hand, could be parceled out in an inclusive fashion only because the tardiness of reform prevented the nomenidatura from enriching itself first...

...Solidarity invested considerable social capital to support shock therapy for three crucial years...

...The party officials who began their own "market transition" even before 1989, transforming their contacts into capital, have weathered the transition quite well...

...Culpable capitalism: According to this view, communism had to give way to "strucWINTER • 1997 • 21 Politics Abroad tural adjustment," entailing elimination of subsidies and budget deficits and the streamlining of enterprises to make them globally competitive...

...In this way, labor got cut out of the picture be24 • DISSENT Politics Abroad fore it could fight to be included...

...As planned, prices skyrocketed, real wages plummeted, enterprises began extensive layoffs...

...But precisely for that reason, we'd do better to understand it...

...When new elections produced a government led by ex-Communists but essentially following the economic policy of the Solidarity liberals before them, the union moved to a new vision of politics in which communism and liberalism are seen as two sides of the same coin...

...Unions will survive, but whether they will integrate workers into a flourishing democratic society or by their inaction drive workers deep into the morass and far to the right we still do not know...

...The answer seems to lie in the nature of labor's opponents...

...When they finally stepped onto the political stage, with a strike in late November 1989, the old regime was already on the verge of collapse...

...It decided on the former path, inaugurating a chaotic process that is still not over...

...It is not that labor really was strong during the communist era...

...Religious, nationalist, anticommunist, masculinist (antiabortion rights, family wages for men), and even "tough-on-crime" themes play an important part in this new-right coalition...

...The long and successful struggle of Solidarity suggested that here workers would have the organizational clout, the resources, and the determination to defend themselves in the new era...

...Whereas Polish unions defined themselves in the struggle against communism, independent Czech unions emerged at the time of nascent capitalism...

...Since 1989, the very term "working class" has made people squirm...

...That has been a political process, not an economic one...

...Check all your figures, dates, names, etc.—they're the author's responsibility...

...Czech workers sleepwalked their way into the future...

...Without any question of their coming to power, Czech unions could survive only by realizing their institutional role of defending the interests of their members...

...Poland's new capitalist institutions began with the exclusion of labor, and this original sin has endured...

...Market thought had not taken hold in Czechoslovakia to the extent it had in Hungary or Poland...

...What joins the two, says Solidarity today, is their lack of concern with "the Polish nation...

...In Solidarity's new view, both commuWINTER • 1997 • 25 Politics Abroad nists and liberals care only about the elite—that is, about themselves—and "real Poles" are left to wallow in the gutter...

...Solidarity is still living out its existential crisis: shaped so intrinsically by the struggle against communism, it still does not know how to wage normal union battles against capital...

...Workers were left with little way to articulate, let alone defend, their interests...

...Unable to develop any compelling antimarket narrative, Solidarity seeks substitute enemies through a new nationalism...

...There were no collective bargaining arrangements at the bottom (wage levels were set from above...

...But workers were supposed to be privileged then, and the discrediting of communism has meant the discrediting of all its key propositions...

...In Poland it's another story, as the liberals' complete disregard for labor has finally led labor to disregard the liberals...

...They squandered that trust when they pushed Solidarity into support of a radical marketization program whose true social costs they disguised...

...Lech Walesa won the presidency in 1990 by saying he would accelerate marketization...

...Since wage and exchange rate adjustments could not suffice to make firms profitable, the Czech government also had to go easy on bankruptcies...

...The liberal press in Poland, anxious to tar all opponents of the market as irrational fundamentalists, delights in it...

...Late marketization also helped labor in that it kept the old nomenklatura at bay...

...Nevertheless, the achievement of Czech "social liberalism," as Orenstein calls it, has been to ensure that dissent is expressed within an established liberal democratic framework...

...there was no tripartite council at the top...

...The Poles are learning it the hard way...

...What do the different ways in which labor has been integrated into the new system mean for politics...

...Czech workers, however, not having had market economics pushed at them by government and opposition alike, did not yet "know" that capitalism was in their best interests...

...All unions in Eastern Europe have faced tough battles with the coming of capitalism, but how they react depends largely on the legacy of their struggle against communism...

...How did this come about...

...Wrzodak has led a number of militant demonstrations, including the first violent ones of the post-1989 era, in which the government is denounced for selling out the interests of the nation...

...What Has Happened to Solidarity...

...Whereas 1989 in Poland appeared to mean that labor had finally won, in Czechoslovakia it meant that labor had to start organizing...

...Yet it is precisely here that labor has had its greatest success...

...It did this by maintaining outright subsidies to large industrial dinosaurs, particularly in the steel sector, and by refusing to enforce a bankruptcy act passed by parliament in 1991...

...Benefits for labor included more than just low unemployment...

...In June 1996, even the Gdansk Shipyard, the factory that set in motion the fall of communism with its Solidarity strike of 1980, was thrust into bankruptcy proceedings...

...In the workplace, meanwhile, Czech unions won limited co-determination rights in privatized firms (again in contrast to Poland, where Solidarity sanctioned the withering away of the powerful Employee Councils...

...In Poland and Hungary, not to mention Russia, the communist elite began creating a market economy to serve its own interests years before the political transition: "spontaneous privatization," it's been called, meaning the theft of state-owned wealth by the bureaucracy turned kleptocracy...

...Unfortunately, this has meant not just a rejection of economic liberalism but very often a rejection of political liberalism as well...

...The problem is that it is dominated by "communists" (in their new role as "capitalists"), foreigners, and Jews...

...Even workers seem unable to imagine the need to organize on behalf of their own specific interests...

...Instead of striking a deal, the union offered the government total support, and the government gave the union nothing in return...

...3) Type your ms double-spaced, with wide margins...

...Whereas Poland utilized a prolabor discourse to mask a neoliberal policy, the Czech Republic employed a neoliberal discourse to disguise a prolabor policy...

...Moreover, the government took an active rather than reactive labor market approach, combating what unemployment there was through policies of job creation and retraining, in contrast to the simple cash payments generally relied on in Poland...

...Investors looking warily at Poland saw Czechoslovakia as the emerging capitalist haven where all of the old regime's guarantees for labor could be shed without remorse...

...In this situation, Czech unions accepted the wage reduction in return for commitments on employment...

...With an eye to the latter's crucial organizational and physical assets, the activists agreed, and democratically took control in March 1990...

...Social benefits paid for by factories have eroded dramatically, as enterprises change from being social institutions to economic ones...

...The answer is that it has helped consolidate democracy in the Czech Republic while jeopardizing democratic stability in Poland...

...The new union leaders needed to win concessions, and the new government leaders needed to win popular support...

...The New Dealers in the United States knew this quite well...

...Although labor in the Czech Republic may be in a better position than in Poland, that does not mean that Czech workers are satisfied with their lot...

...The Czechs stumbled into it accidentally...

...This process began in earnest in 1993, when Solidarity led a massive strike campaign of teachers and hospital workers and then forced the ouster of the government of Prime Minister Hanna Suchocka, despite that government's Solidarity pedigree...

...Despite its reputation as the country in which capitalism has gone farthest— a reputation due to the relentless neoliberal rhetoric of Prime Minister Vaclav Klaus and impressive (though misleading) official figures on the extent of privatization—both individual workers and organized labor emerged in a better position than in Poland...

...Low wages might help maintain employment, but that does not make them popular...

...The paradox is that WINTER • 1997 • 23 Politics Abroad labor has done better in the Czech Republic than in Poland precisely because it had been insignificant earlier...

...It is questionable whether they could have pulled a strike off—unlike Polish workers (but much like Hungarians), Czechs are quite unaccustomed to strikes—but the threat helped modify the government's proposals...

...They were ready to form new trade unions, but the official leaders of the old trade unions, suddenly announcing that they were democrats too, invited the new activists to run for election in the existing structures...

...The long communist experience has left unions hard-pressed to act in defense of workers against capital, and without protection against the economic effects of liberalism, there is little that binds workers to the political principles of democracy...

...Hundreds of thousands have lost once-secure jobs...

...For if there was one country where labor was expected to do well in the new era, it was Poland...

...Solidarity had internalized the view (one refuted by postwar West European practice, it should be noted) that unions could only be a drain on economic development...

...An organizational logic pushed the unions into opposition, and Klaus's political ambitions led him to compromise...

...The story of labor's demise generalizes too much from the Polish experience...

...Only in Czechoslovakia was labor up for grabs...

...Contemporary notions of justice scrap any idea of special rights for workers: policies should benefit "citizens," perhaps "the nation," but not "workers...

...Between 1980 and 1989, the intellectuals who had won the workers' trust moved from being champions of political liberalism to being champions of economic liberalism...

...If in 1989 Poland seemed to be labor's great hope, Czechoslovakia seemed to be a lost cause...

...Overall, labor has taken a beating...

...Organizing against capital is the best way of stabilizing democracy...

...Although the privatization program did not allow direct employee ownership, a universal voucher program distributed property to the citizenry at large (in contrast to Poland, which emphasized sales to individual investors...

...It is no surprise that workers react by leaving the union...

...Only here was pluralism able to do what it is supposed to do...

...Either communism is responsible or capitalism is...

...This scenario gave labor the clout it lacked elsewhere...

...In 1996, while Czech unions have stayed in the democratic political mainstream, Solidarity has embarked on an extended flirtation with the illiberal right that could bring dangerous results in the future...

...All in all, labor's better deal derives not from any "natural" advantages enjoyed by the Czech economy but by policies worked out between government and unions...

...Indeed, both right and left see capitalism as the cause of labor's crisis, with the difference that the former applaud it while the latter bemoan it...

...Paradoxically, it attacks the liberals and exCommunists for not being promarket enough...

...And so, whereas the latter two countries were ready to introduce their new economic programs in 1990, the Czechs used 1990 to discuss what that program should be...

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...As Eastern Europe moves toward capitalism, many East European workers see trade unions as relics of communism...

...At one antigovernment march in May 1995, Wrzodak supporters chanted "To the Gas...

...Not surprisingly, the second view is more popular among Western observers...

...Moreover, in the last couple of years Klaus has renewed his campaign against labor, citing budgetary problems to justify cutbacks in key areas, leading to a huge hospital strike in March 1996 and general dissatisfaction with the direction of reform...

...Although Solidarity '80 attacked the effects of shock therapy, its proclaimed target was not the market but the "aliens" who were allegedly distorting it...

...A final factor explaining Czech labor's better position is, ironically, its lack of political affiliations...

...In opinion polls since 1991, when asked who best represents their interests, workers overwhelmingly choose the category "no one...

...They could not simply relinquish decision-making authority to the government, because, unlike in Poland, neither historical, institutional, nor personal ties linked them to the new government...

...There are two main ways to explain it...

...Solidarity's former intellectual elite, meanwhile, has become today's elite of government officials, political consultants, economic advisers, and corporate middle management...

...Indeed, given the record of the past seven years, it's surprising that the antiliberal backlash is not greater than it is...

...In the postcommunist era there often seems to be something downright reactionary about pressing for the rights of "workers" per se...

...Economic necessity" required an end to employment guarantees and low prices on essentials, and there is nothing labor can do about it...

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...In the crucial first years, therefore, when the postcommunist institutional arrangements and industrial relations structures were set up, parties and politicians had to fight to win Czech labor's support...

...So pervasive was market belief in Poland that shock therapists could win workers over by saying they would push "real" marketization...

...And as long as the trade unions are not normal, neither is the democratic system...

...Although economists and transition theorists are unanimous about the advantages of early marketization, the Czech example suggests that tardiness is better for labor...

...Instead of bargaining, Solidarity capitulated, committing itself to a program it would have no role in generating...

...By 1992, three years of experience with shock therapy had left workers susceptible to any apparently antimarket appeals...

...Lech Walesa gave his unconditional support...

...Still, why should the country with the stronger labor movement end up in a worse place than the one where labor had for so long been dormant...

...This gave the union (CSKOS) its great opportunity...

...A look at the historical record, however, shows both factors to be crucial...

...As we're not an academic journal, we prefer that they, wherever possible, be dropped altogether or worked into the text...

...Perhaps more important, they could not do so because the government didn't have a plan, either...

...The market is a good thing, Jurczyk said, if run by "real Poles...

...Workers seemed to have gained political power with Solidarity's electoral victory in 1989 and Lech Walesa's presidential victory one year later...

...In 1990, the first Solidarity government introduced a program of economic shock therapy...