It’s hard to believe that at the beginning of the 1990s Poland was regarded as being the best hope for the left in Central Eastern Europe. It now stands as the country with perhaps the weakest left in Europe and where right-wing ideology and parties dominate. Yet, Poland is a country whose destiny is largely determined by changes occurring in Europe, particularly inside the EU. Therefore, in order for the Polish left to reinvigorate itself, it needs to integrate with and seek to influence the political debates and movements occurring within the wider European left and help promote a common programme for European development.
THE LEFT’S FALSE DAWN
Poland had emerged from Communism with an opposition movement organised around a trade union that included strong and organised left-wing currents. Solidarność was known far beyond Poland’s borders and had stood as a beacon of hope for those searching for the emergence of a new democratic socialist left in the East. It perhaps seems strange, looking back from today’s perspective, that many had held the mistaken belief that the events of 1989 represented an opportunity for the rejuvenation of the international left. These hopes disintegrated once the realities of the transition to capitalism became apparent, and along with them any prospect that the Solidarność movement could help form a new democratic left in Poland.
Conversely, Poland was also the first country in the region where a former ruling party managed to successfully reform itself in a social democratic direction and then form a government. The transformation of the PZPR, into its new social democratic form of the SLD (via the SdRP,) was presented as a model for emulation in the region. The young, educated bureaucrats – primarily Kwaśniewski and Miller – had achieved the seemingly impossible and were leading the way in showing how a former ruling party could become the major organisation of the left.
The recent parliamentary elections in Poland signal the end of this course of events. The SLD has been in decline since its disastrous second term in office (2001-05) when it pursued a neo-liberal economic programme, renegaded on its promises of reforming the abortion law and separating the Church and State, and followed Bush and Blair into Iraq. This year’s devastating defeat simply confirms this demise. The party’s activist base, organisation, level of political discussion and reflection are now at an all-time low. The fact that the two major figures of the SLD continue to be Kwaśniewski and Miller says everything that one needs to know about the current state of the party. The very existence of a social democratic left in Poland is now in question, as the liberal populist Palikot Movement seeks to occupy the political space vacated by the SLD.
The project of building a social democratic left, out of the ruins of the former ruling party, was an element of the general transition in Poland. It is therefore no accident that once this transition had been completed – as occurred when Poland entered the EU in 2004 – then the previous political project of the SLD also came to a close. The problem has been that the SLD was ill-prepared for this event and ever since has been unable to articulate an alternative political course that could help to re-build the left. This has been the case, particularly since the outbreak of the present global economic crisis.
SOCIAL DEMOCRACY’S DEMISE
The predicament of the SLD in Poland is part of the general crisis afflicting the left in Europe today. Once the ‘golden age’ of Keynesian capitalism had come to an end by the 1980s, so the left progressively adapted itself to so-called neo-liberal capitalism. What this has meant in practice is handing over the issue of economic growth to the right, through accepting the premise that the private sector and market are the major motors of economic growth. Throughout the era of globalisation and de-regulated capitalist development then this could seem a rational conclusion to make. The aim of the left was reduced to taking the fruits of this economic development and distributing them more evenly throughout society; primarily through tackling social exclusion and supporting the meritocratic ideal of social mobility.
In actual fact this policy was never successful, as economic inequalities grew rapidly throughout the 1990s and 2000s. This was nowhere so obvious as in the UK – where the Blair/Brown governments were the first in the Labour Party’s history when economic inequalities actually increased. For example, as David Harvey in his book on neo-liberalism points out, since the early 1980s the top 1% of income earners in Britain have doubled their share of the national income from 6.5% to 13%.
Yet this huge transfer of income to the rich could be accepted and concealed as the economy continued to grow. Inequality may have been increasing, but most people were becoming richer. As we now know, this economic growth was built upon an unprecedented build-up of private debt, that allowed the economy to continue to rise, yet did not address the fundamental problems within the world economy. Once this credit bubble burst, so economic growth stalled and alongside it the very rationale upon which social democracy had based its programme.
The question now is how the left responds to this crisis. The first possibility is that it succumbs to the new economic orthodoxy of the right, that states that the major block to economic growth is the over-bloated public sector and welfare state and that a programme of cuts and austerity is needed to instigate economic growth. This policy is morally wrong, as it involves passing the burden of the financial crisis onto society’s most vulnerable, but it has some internal logic. For, if social spending, wages, benefits, protections of workers and so forth are reduced enough; then the tax burden can be lessened for businesses, profit levels can rise, banks can recapitalise and a new course of economic growth can begin. This is the logic of the austerity programmes that have been introduced in a number of European countries, including by social democratic parties in places such as Greece and Spain. Yet this will involve a long period of economic pain, social discontent and political instability; as economic growth has actually tended to slow and public debt rise in countries that have so-far pursued austerity programmes.
The problems with the left pursuing such policies are obvious. Over the past few years the injustices of capitalism and the aim to pass the cost of the crisis onto the public sector and poor have become more apparent to ever growing sections of society. When the left – that claims to represent working people and helped to build the European welfare states after the Second World War – has helped implement these austerity measures then they have been severely punished by their electorates. The most recent example of this is the defeat of the Socialist Party in Spain.
INVESTMENT NOT CUTS
Neither traditional Keynesian ‘demand’ style policies nor ‘Third Way’ pro-market solutions are sufficient in today’s economic conditions. The major reason for this is that the global economic downturn has been driven by a collapse in fixed investment, which has accounted for around 96% of the fall in GDP in the OECD area. The economic contraction has tended to be deepest and most prolonged in countries where fixed investment has fallen the most; and the greatest success has been achieved in countries which took measures to sustain or increase fixed investment – most notably China. For this reason it is not sufficient to respond to such a crisis simply through pro-demand policies (which does not mean that these should not simultaneously be pursued) but rather by economic solutions that correspond to the cause of the crisis (i.e. investment). Such an understanding fits the case of the Polish economy.
Despite the huge social problems facing Poland today (high unemployment, large social inequalities, under-funded public services, poor labour protections, etc.), the country has so-far been protected from the worst effects of the global economic crisis. This is not because the crisis did not affect the country – it too suffered a fall in private investment as elsewhere. For example, in 2010 private investment declined by 7.4% in relation to 2009 and by 20% compared to 2008. However, what has separated Poland off from the majority of other countries in Europe, is that while private investment collapsed public investment increased. This has been made possible by the availability of EU funds (primarily the 67bn euros in structural and cohesion funds in the 2007-11 EU budget) that has provided the possibility for infrastructural investment at a level not seen in Poland since the 1970s. With the government allowing public debt and the budget deficit to moderately rise, it has been able to take advantage of these funds, whilst maintaining the majority of its social spending. Also agricultural subsidies have protected the living standards of a social group that had been the most excluded in society prior to EU accession.
All of this has of course been insufficient to address the fundamental socio-economic problems facing the country. The left should rightly point out the deficiencies of this infrastructural investment. For example, building a series of unsustainable stadiums and prioritising road development over railways is not the best way to pull the country out of its semi-peripheral status. Nevertheless, the Polish left should be underlining the fundamental point: public investment as an alternative to austerity and cuts is the best road out of the Europe’s current economic malaise. By doing this it can then further propose a programme that would best suit the economic, social and environmental needs of Europe and Poland.
The problem, however, is that this present course of economic development is likely to soon come to an end. The upsurge in public infrastructural investment will probably slow down significantly following Euro2012. Also the PO government – during its second term in office – is succumbing to the European policy of austerity and budget cuts. Poland’s position on Europe’s periphery means that it is particularly vulnerable to the pressures of the financial markets and its rating agencies. Also, the neo-liberal clause in Poland’s financial law and constitution (that restricts public debt from increasing above 55% and 60% of GDP) places an unnecessary obstacle to the government implementing a pro-growth economic programme.
FEDERALISM OR NATIONALISM?
The whole European left now stands at a cross-roads where all existing roads seem to lead in undesirable directions. Europe’s leaders are imposing a programme of austerity across the continent that is stalling economic growth, increasing inequalities and eroding public services. The democratic institutions and practices in a number of countries have been by-passed and undermined in order to push through policies for which no electoral mandate could be gained. The rating agencies now have a stronger say in many countries’ economic policies than their sovereign parliaments do. The recent example of Hungary’s bond’s being reduced to ‘junk status’ during a year when its budget has actually moved into a surplus is startling. The final destination of this course could be to create an authoritarian semi-European state in Europe (perhaps limited to the Eurozone or even a select group of richer states), that will remove the distraction of democratic practice from economic policymaking.
In response to this situation nationalism, xenophobia and racism have risen. The Eurozone crisis has provided the opportunity for the nationalist right to build upon social frustrations through promoting its agenda of division and reaction. In the richer states in Western Europe this has primarily come in the form of anti-immigrant rhetoric and Islamophobia. The suggestions of the far-right in Holland to restrict the right of citizens from Central Eastern Europe to work in the country, the proposals of the right of the Conservative Party in the UK to leave the EU and the projects to ban Muslim women from wearing their traditional dress in a number of countries are parts of this trend. In Central Eastern Europe the far-right has tended to focus on issues such as Lesbian and Gay rights and the Roma communities as a means to advance their agenda.
There are many on the left who are tempted to see the break-up of the EU (at least in its present form) as an opening to promote a new ‘national Keynesian’ policy of economic development. However, the left should realise that this policy will rather open up a new period of economic protectionism that would further strengthen the nationalist right. This will be most pronounced in the economic peripheries, such as in countries like Poland. This is the conclusion to be drawn from the experience of the Great Depression in the 1930s, where the economic contraction was much greater in Central-Eastern Europe than in Western Europe. This was due to the huge fall in foreign investment coming into the country (there were no cohesion and structural funds from the EU in those days!) and the policy of protectionism that most negatively affected the agricultural economies in the CEE. In today’s reality it would mean such things as closing the labour markets in Western Europe and reducing the flow of EU funds from the richer to the poorer states.
ANOTHER EUROPE IS POSSIBLE
As Europe divides around these two unpalatable alternatives, the left needs to forge its own course. It will be virtually impossible for the individual European countries (particularly on the continent’s periphery) to follow an independent progressive path of development. The recent declaration of Poland’s Foreign Minister, Radosław Sikorski, that he supports a federal Europe based upon the model of the USA, shows how Poland’s elites are desperate not to be left out of any new political convergence in Europe. However, what politicians like Sikorski are proposing is that Poland will be allowed into the elite club that will impose cuts and austerity throughout the continent. The fact that both the SLD and Palikot Movement gave their almost uncritical support to Sikorski’s speech highlights the continual weakness of the left in Poland. In the absence of a progressive left alternative, the conservative right radicalizes in its reactionary rhetoric (e.g. advocating the death penalty).
In order to rebuild its strength domestically and in Europe, the Polish left should be at the forefront of proposing an alternative way – one where Europe moves in a more federal direction but which is based upon real participatory democracy, a common investment programme and a convergence of living standards and public services. A policy of public Green investment, economic redistribution, free movement of labour, democratic participation and secular liberal rights are the basis for a common Europe for all. The positive experiences of the Polish population of EU membership means that it is more likely to be supportive of further EU integration than in the richer states where the attractions of protectionism are greater. By realising and acting upon this, the Polish left could once again become a positive influence in European politics.