Unbinding the Polish Economy

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WLADYSLAW GOMULKA'S immediate predecessors, after mismanaging the Polish economy for a number of years, have left him a legacy of debts and unfulfilled promises of increased living standards, but scant means with which to patch up the Government's credit. Foreign currency holdings are low and dwindling, and government stockpiles of goods and raw materials are depleted. The peasants cannot be induced to market a larger share of their produce, while the townspeople, who have been paying the price of industrialization by their sacrifices, can be made to pay no more.

To stave off bankruptcy and to check inflation, Gomulka and his economic experts are bending their efforts in two directions. First, they are endeavoring to bring fairly prompt relief to consumers by obtaining external aid, a redirection of foreign trade and a cut in investments and armaments. Second, they expect to uncover "reserves" in the Polish economy itself so that greater well-being for the whole population may be achieved with the same effort and the same resources. This they propose to do by reforming the inefficient institutions that in the course of the last ten years have turned Poland into a miniature of the Soviet economy.

It would be wrong to lay all the blame at one door and to count on a rapid and lasting improvement as soon as the Soviet Union ceased to control Poland's economic policy. A search for the sources of the present economic ills would take us back before the First World War to the boom years when the mines and industrial plants of the future state were developed for the capacious national markets of the partitioning Powers--Germany, Austria and Russia--and then were cut off from these markets after Poland became independent; to the runaway inflation of the early 1920s; to the depression of the 1930s, when prices and money wages were driven down with resulting unemployment and dislocation; to the gradual cartelization and étatisation of the economy throughout the whole inter-war period; and finally to the disastrous German occupation during World War II, when entire cities, including Warsaw, were razed and over six million Poles were killed...