This is Volume XI of a series of eleven of Economic and Society. Originally published in 1953, this includes a look at the Polish-Czech example- looking at the influence if USSR and bases of change in Poland; Czechoslovakia, commonalities and their transition to socialism.
Frequently asked questions
Yes, you can cancel anytime from the Subscription tab in your account settings on the Perlego website. Your subscription will stay active until the end of your current billing period. Learn how to cancel your subscription.
No, books cannot be downloaded as external files, such as PDFs, for use outside of Perlego. However, you can download books within the Perlego app for offline reading on mobile or tablet. Learn more here.
Perlego offers two plans: Essential and Complete
Essential is ideal for learners and professionals who enjoy exploring a wide range of subjects. Access the Essential Library with 800,000+ trusted titles and best-sellers across business, personal growth, and the humanities. Includes unlimited reading time and Standard Read Aloud voice.
Complete: Perfect for advanced learners and researchers needing full, unrestricted access. Unlock 1.4M+ books across hundreds of subjects, including academic and specialized titles. The Complete Plan also includes advanced features like Premium Read Aloud and Research Assistant.
Both plans are available with monthly, semester, or annual billing cycles.
We are an online textbook subscription service, where you can get access to an entire online library for less than the price of a single book per month. With over 1 million books across 1000+ topics, we’ve got you covered! Learn more here.
Look out for the read-aloud symbol on your next book to see if you can listen to it. The read-aloud tool reads text aloud for you, highlighting the text as it is being read. You can pause it, speed it up and slow it down. Learn more here.
Yes! You can use the Perlego app on both iOS or Android devices to read anytime, anywhere — even offline. Perfect for commutes or when you’re on the go. Please note we cannot support devices running on iOS 13 and Android 7 or earlier. Learn more about using the app.
Yes, you can access Transitional Economic Systems by Dorothy W. Douglas in PDF and/or ePUB format, as well as other popular books in Social Sciences & Sociology. We have over one million books available in our catalogue for you to explore.
The Republic of Poland began its independent life after World War I as a backward, predominantly agrarian country. Some three-quarters of its population of around thirty million lived on the land. In the provinces east of the Curzon Line, comprising nearly half the territory of that time and inhabited by about a third of the population, the proportion living on the land was much larger: it ran to over five-sixths. Here also the living standards were lowest. The greater part of the inhabitants in these regions were Byelorussians and Ukrainians, while estate owners were chiefly Poles. A difficult minority problem was thus added to a difficult social situation.1
Polish land was for the most part of mediocre quality, better suited, it was held at that time, to rye and potatoes than to wheat. Forests were not very abundant and were chiefly to the east. Foodstuffs constituted over 40 per cent of all Polish exports between the wars—witness the fame of Polish bacon—but domestic consumption was grossly inadequate. ‘The diet consisted largely of bread and potatoes.’2 Timber was also important as an article of export, but cutting was wasteful: over half the timber felled was used for fuel, and this in a country exceedingly rich in coal. Less than 10 per cent of the timber output was put to industrial use.
Coal, by far Poland’s greatest resource, came chiefly from the rich seams of the Silesian coal basin, none of it from the eastern regions. About a third of it was exported, and upon the remainder was based such industrial development as the larger Polish cities attained.
The land system, inherited from three empires, was the crux of Poland’s economic problem. Methods of tillage were antiquated and wasteful of man-power; production per acre was low. In many regions the strip system prevailed. Dwarf farms alongside large estates, rural overpopulation and the scarcity and high price of land continued throughout the period between the two wars.
So early as 1919, under pressure of the revolutionary wave that was sweeping Europe at the time, agrarian reform legislation had been passed in principle, to provide for the breaking up of large estates and the creation of peasant holdings of liveable size. But implementation remained far behind profession. In the census of 1931, two-thirds of rural holdings were below 12
acres in size and a quarter were below 5 acres. The partition and sale programme had ended up, as is so often the case in agrarian reform programmes, in the hands of the estate owners themselves. Hence an excessively slow rate of division, high maximum sizes for the residual estates, numerous legal exemptions and exceptions, and still more illegal evasions. Also as usual in such cases, there remained a high purchase price for the land and no adequate provision for cheap credit. As a result, while the proportion of giant estates was greatly reduced, the greater part of the land sold from them had gone to build up smaller estates and large rather than small new farms. The total number of holdings of more than 250 acres each had been reduced by only 25 per cent. The small peasant had found land prices so high that when he did purchase, as many thousands did in their land hunger, his successive payments left him nothing for equipment and improvements. Rural standards of living, already wretched, declined rather than rose in many regions, and the burden of rural indebtedness increased. Subdivision of land among children made matters worse. Industry meanwhile was not developing rapidly enough to enable the cities to absorb the rural surplus population, estimated at some 5,000, 000 out of a total of 20,000,000 dependent upon agriculture. Emigration, moreover, had been largely cut off, and increasing tariff barriers had been erected against agricultural products by the major industrial powers. The result was a vicious circle of impoverishment, inadequate domestic market for the products of industry, continued low industrialization and high urban unemployment, further damming back of the rural surplus on the land.
All these difficulties had been heightened by the depression of the early 1930’s, which lowered agricultural prices disproportionately to industrial ones; but the disparity was not improved as depression began to recede in the face of rearmament. It is small wonder, therefore, that the years immediately before the second war saw acute peasant restlessness culminating in some regions in local outbreaks.
Industry in independent Poland developed slowly in the period between the two wars. Recovery from the devastations of World War I took a long time,3 communications had to be improved and altered, and the whole economy had to reorient itself upon a unified instead of a centrifugal basis east, west, and south. The older industries and industrial centres found it hard to readjust, while newer businesses did better. Capital was scarce and inclined to be timid. The slowness of business growth is indicated by the census of 1931. Urbanization in ten years had increased but 3 per cent; mining and industry together employed but 15 per cent of the gainfully occupied, and in industry there were nearly half as many employers and self-employed workers as there were wage-earners—in other words, a great deal of so-called industry was still in the handicraft stage. The total number of industrial wage-earners was about a million and a half.
Over a large part of Polish industrial concerns foreign capital remained dominant. Thus in 1937 in mining and foundries, concerns predominantly foreign-owned controlled about 85 per cent of the total investment; in chemicals, 80 per cent; in electrical manufacturing, 90 per cent; even in textiles, 40 per cent.4 Where employers were foreign, the government apparently treated them with great circumspection, and tension between workers and employers was quickly translated into tension with the government as well. Public suspicion of foreign firms was directed especially: against the French in the case of the textile industry which had long needed renovation and was said to be being ‘milked’ by its owners in the search for quick profits, and against the Germans—by the 1930’s the Nazis—who were concentrated in the all-important defence industry sector, particularly mines and iron and steel works, but also in chemicals and electrical manufacturing.
Poland’s foreign trade, amounting to about 10 per cent of her total production, remained that of a predominantly agrarian country. Over half her exports consisted of foodstuffs and timber, 15 to 20 per cent of coal, while she imported manufactured goods. Germany was in a key position geographically to control the country’s trade and used it to restrict rather than to further industrialization. The carrying trade was a serious problem. Transit across Germany to the west had been hampered by a prolonged tariff war. Subsequently the port of Gdynia was built by the Polish government on the narrow strip of coast furnished by the Polish Corridor, and considerable overseas trade, especially with England, developed. However, 90 per cent of the shipments from Gdynia were carried by foreign vessels. After the accession of Hitler, German trade policies became openly dominating. Purchasing foodstuffs and raw materials under terms increasingly severe for the seller, Germany, here as elsewhere in eastern Europe, sought in return the acceptance of manufactured goods on a scale necessitating large clearing balances.
Polish industry was highly organized. Employers’ associations of different industries, many of them publishing their own technical and public relations literature, combined in the powerful Central Union of Polish Industry in Warsaw. The cartel movement was also highly developed in Poland.5 By the beginning of the depression it controlled some 40 per cent of Polish industry, by its end, virtually all basic industry and much that was not basic, especially in the export trades. Internal cartelization, in turn, enabled Polish industry to participate in international cartels.
Government cartel policy apparently resembled that of the Weimar Republic: that is, it varied, but the cartels flourished, particularly the larger ones. There was the same disparity between the ‘cartelized’ and the ‘free’ prices that was so noticeable in Germany in the 1920’s, with results that were even more disastrous because of the predominance and poverty in Poland of agriculture with its entirely ‘free’ price system. With the arrival of the depression, the price ‘scissors’ opened ever wider and never closed again. On the other hand, in spite of public clamour, the government found the cartels more than convenient. They served to support the governments two-price policy, of high internal prices and low export prices, secured in many cases by government export bounties; they tied in well with the system of state-owned enterprises of which we shall speak in a moment, and they were a source of serious political support.
The labour policy of Polish employers also apparently resembled somewhat that of the German industrialists of the 1920’s.6 There was a strong movement for rationalization, with marked results in some fields. It was claimed that an increase of almost 30 per cent in average labour productivity in large and medium industry had taken place between 1928 and 1937. The figures for productivity in coal mining are striking. The increase here between 1928 and 1937 had been 43 per cent, and absolute tonnage production at the latter date per man per day was said to be the highest in Europe.
Wages in Polish industry and mining were low in comparison with the more advanced industrial nations, but high in relation to Poland’s farm wages and income. Accompanying rationalization and persisting unabated after the depression was over, went a very high unemployment rate. It was particularly serious in mining.
Social legislation in the new Poland began at an advanced level. In November 1918 a forty-six-hour week had been decreed, and in spite of various weakening provisions introduced later, the basic standard was not abandoned until 1933, when hours were lengthened to forty-eight. Paid vacations, introduced in 1922 on a high level, also continued, although sharply modified in 1933. The various forms of social insurance legislation were introduced early and remained. Here modifications took the familiar form of contracting the scope of the insurance, cutting its amounts, and shifting the cost incidence more heavily upon the employee. There were also administrative changes, removing from the machinery of administration the insured themselves and the trade unions.
Trade unions in Poland were highly organized and active for a country with so little large industry. They were split along both political and sectional lines. The Socialist federation of unions was the largest. Legally enforceable collective agreements prevailed over a large portion of industry, and the government sought to stabilize wages and prevent strikes by an elaborate system of compulsory arbitration boards. Serious waves of strikes under organized union leadership nevertheless took place.
Political parties were exceedingly numerous, an inheritance from Partition, a series of different labour parties, peasant parties, etc., duplicating one another from different sections of the country. While parliamentary rule lasted, they operated in rather large, heterogeneous combinations. After Pilsudski’s coup d’état in 1926, Parliament became unimportant, and just before his death in 1935 the Constitution of 1921, which had based all power upon Parliament, was formally abrogated in favour of an authoritarian Constitution centralizing power in the hands of the President.
Interrelation between government and business interests was exceedingly strong, and one interesting form of it was the characteristic Polish étatism—a development of State-operated public and/or mixed ownership concerns. Lack of native capital in a new political setting was undoubtedly one of the initial reasons for this development, but a number of other factors are cited by Dr. Zweig.7 The first of these was the inheritance by the new State of old State monopolies. ‘The Polish State inherited from the Partition Powers large State-owned factories, railways, forests, mines, banks, and fiscal monopolies. The rule applied in these cases was that monopolies of this kind operating in one part of Poland were extended to cover the whole. …’8
Another reason was the pressure to begin installations of national importance for defence and communications. Large State munitions factories, the port of Gdynia, new railways, a large new chemical factory, were built by the State during the 1920’s. In the latter 1930’s a whole new regional industrial development, known as the Central Industrial District, was begun by the State for defence purposes.
In certain instances, large foreign undertakings were taken over by agreement with the shareholders. The most important of these was a great Upper Silesian complex of foundries, mines, and steel works, that had been entirely controlled by a German.
Again, with the advent of the depression, the Government felt itself constrained to take over, either directly or through its position as friendly creditor, various concerns of importance that were failing. ‘Thus began a very peaceful process of what was called “cold socialization”, i.e. the socialization of losses.’9
The net result of all this was a very considerable proportion of State ownership. Including government buildings, railways, forests, the fiscal monopolies and the shares in banking and industry, the total by 1927 ran to nearly 12 per cent of the national wealth.
‘In industry the State controlled 70 per cent of the iron production, 30 per cent of … coal … 50 per cent of the metal industry … and the larger part of the chemical industry. …10
Many concerns were mixed in character, with the State sharing ownership with private business. Again, State-owned enterprises often participated in the private cartels. To the foreign reader later on it was sometimes difficult to tell which was ivy and which was tree.
Polish foreign policy during the twenty years between the wars was closely bound up with the nature of the domestic régime. Of the three former empi...
