The Costs of “Shock Therapy”: Economic Transition in Poland

The Costs of “Shock Therapy”: Economic Transition in Poland

At the beginning of 1990, the ideology of laissez-faire had made a triumphal return to the Polish political scene, and nothing appeared likely to disturb the self-assurance of the neoliberals. By now, however, there are increasing signs of disarray, crisis, and pessimism among those recently triumphal. In many of his recent speeches in the West, President Lech Walesa has warned that Poland’s program of economic reform may collapse. The possibility of such a collapse has also been referred to by the new head of Solidarity, Marian Krzaklewski. In an interview under the title “The Vicious Circle of Post-Communism,” a well-known sociologist, Edmund Mokrzycki, made the following comments on the pride and joy of the neoliberals, the program of Finance Minister Balcerowicz:

Is the only way out of this vicious circle via a dramatic revolution in other words, a break- down of the entire system—or will we manage to set in motion a self-generating development? Balcerowicz assumed that such a mechanism would be provided by liberalization, combined with a radical stabilization program. After four- teen months, we have reason to doubt its effectiveness. It has not set in motion sufficiently strong processes of systemic change. On the other hand, it has set in motion . . . an extremely dangerous and one-sided process in which the state is relinquishing its ownership of the means of production. One-sided—because to date the reforms have not succeeded in creating a new group of owners (Rzeczpospolita, March 18, 1991).

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