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Europe’s Growth Champion: Insights from the Economic Rise of Poland

Author(s):Piatkowski, Marcin
Reviewer(s):Guzowski, Piotr

Published by EH.Net (June 2020)

Marcin Piatkowski, Europe’s Growth Champion: Insights from the Economic Rise of Poland. Oxford: Oxford University Press, 2019. xxv + 370 pp. £25 (paperback), ISBN: 978-0-19-883961-3.

Reviewed for EH.Net by Piotr Guzowski, Faculty of History and International Relations, University of Bialystok.

 

Marcin Piatkowski’s book is a study of the contemporary history of Poland and its economic success after the fall of communism. Simultaneously, the author tries to assess the current position of Poland in a long-term historical perspective stretching back to the end of the Middle Ages. Piatkowski claims that the term “Golden Age” ought not to be used with reference to sixteenth-century Poland, but, more appropriately, to Poland after 1989. All his arguments are presented from the perspective of an economist. The author is a senior economist at the World Bank and Associate Professor at Kozminski University, Warsaw.

The book is divided into ten coherent chapters, each of which is followed by a brief summary and conclusions. In addition to tables and charts, it contains boxes with short discussions of specific topics that could not be given sufficient attention in the main body of the text. The first chapter is a universal synthetic presentation of institutional, cultural and ideological sources of economic growth. The following three chapters are concerned with Poland’s distant past — its economic history in the early modern period, and the country’s less distant past — post-war communist era and transformation after 1989. Further, the author presents his own interpretation of the reasons for Poland’s economic success in the last three decades and offers scenarios of its future growth.

Piatkowski, drawing on the achievements of contemporary economic thought, especially the institutional approach, constructs logical models of growth (chapter 1) and applies them to the study of economic development of contemporary Poland (chapters 6 and 7). He seeks to prove the thesis that late twentieth and twenty-first-century Poland experienced unprecedented economic growth, incomparable with any other historical period. Although many (if not most) of the author’s theses provoke discussion and definitely require deeper justification, his analysis of the role of institutions, culture, ideas and leadership is very clear and persuasive. The clarity of the author’s reasoning is in fact one of the book’s greatest merits, even though the resulting simplifications add unnecessary journalistic quality to the narrative. Upon publication of the book, the author frequently presented his economic views to the press, commenting on current economic policies.

It is hard to disagree with the author that one of the major sources of post-communist economic transformation and a key reason for adaptation of western institutions in Poland was a desire “to return to Europe and feel European again” on the part of the political elite (p. 237). Piatkowski is also right stating that “there is no single explanation for Poland’s success since 1989” (p. 201). His interpretations are definitely worth considering in discussions on the course of socio-political and economic reforms in post-communist Poland, but it must be born in mind that they are the result of the reflection undertaken from the macroeconomic perspective of financial institutions.

Piatkowski’s detailed analyses concerning both the events from the recent history of Poland and from the early modern period vary in quality. Apart from relatively balanced deliberations, for example on the importance of religion in the lives of Poles and its impact on economic activity, the book also contains many grossly anachronistic opinions about the past. This is illustrated by the author’s approach to the legacy of communism. Only in one short subchapter does he mention that “Communism fell because of extractive political and economic institutions that supported growth in the short term, but failed to sustain it in in the long term. […] Economic institutions did not provide incentives for entrepreneurship, ‘creative destruction’, and innovation. They promoted the status quo and frowned upon change” (p. 88). In the light of these facts, the author’s insistence on emphasizing the advantages of socio-economic changes in Poland between 1944 and 1989, one of which was to be the creation of egalitarian society, appears self-contradictory (“Why communism was not all bad,” “Positive legacy of communism,” “How communism destroyed feudalism”).

The anachronism of such an approach is in comparing the effects of half a century of communist rule with the situation in Poland before World War II. The author assumes that if Poland had never fallen under communism, remained independent and capitalist for 50 years after the war, it would not have modernized, like Spain or Italy did, but would have remained a backward peripheral economy in the shadow of the Soviet Union (p. 107-12). However, what Piatkowski sees as a chance for Poland, can also be viewed as a major obstacle by which the communist system deprived the country of a prospect for much earlier growth. The author tends to forget that in 1939 the Soviet Union invaded Poland and this fact had grave consequences. One of the elements of Soviet occupation in the years 1939-1941 and later in post-war years was physical extermination of the Polish intellectual elite. Its loss should be regarded as a lost chance for growth. These people were the lost human capital; they could have become the leaders of economic modernization after 1945.

The author mentions that Poland’s transition did not much benefit the communist elites, because only 9 percent of the Polish former top communist party members held higher political offices after 1990. Nevertheless, considering the fact that the first president of Poland elected by the national assembly in 1989 was a communist general, Wojciech Jaruzelski (responsible for the deaths of dozens of protesters killed in 1970 and under whose leadership in the 1980s Poland had experienced its deepest economic crisis), the third president (for two terms between 1995 and 2004) was Aleksander Kwaśniewski, who had been a minister in the last two communist governments, and two prominent communists served as Prime Ministers (Józef Oleksy, 1993-95; Leszek Miller, 2001-2004), it can be concluded that quality was much more crucial here than quantity. Moreover, the starting point in building an economic position for members of the former communist establishment favored them in comparison with all other post-1989 entrepreneurs.

Piatkowski emphasizes that one of the most important achievements of the egalitarian communist system was that it allegedly provided lower-class youth with unparalleled educational opportunities. As he stresses, many Polish ministers of finance/economy after 1989 were the beneficiaries of this system and gained their professional experience in the communist era, doing their scientific internships in international institutions. However, the author ignores the fact that in communist Poland the freedom to travel abroad was a privilege for the few. The ministers whom he praises as leaders of economic transformation after 1989 (Leszek Balcerowicz, Andrzej Olechowski, Marek Belka, Marek Borowski, Grzegorz Kołodko) were the same people who had for years worked to maintain the communist system in Poland and had been to a lesser or greater extent responsible for the economic crisis in the 1980s. Presumably Piatkowski’s positive attitude towards the role of communism and specifically towards former members of its establishment should be viewed in the context of the fact that he was a doctoral student of Grzegorz Kołodko, an adviser to the President of the National Bank of Poland in communist era, and later Minister of Finance in 1994-1997, 2002-2003, praised by the book’s author as a “hero of post-communist transition” (p. 221).

While accepting many of the author’s theses concerning economic growth in general, it is still worth considering alternative interpretations of the processes and events described in the book. Several omissions appear particularly conspicuous. One of them is the author’s failure to mention Mieczyslaw Wilczek’s Act. It was introduced in 1988 by the minister who, although he served in the last communist government, was an entrepreneur and inventor, and supported a radical liberalization of economic activity. The Act contributed to the explosion of private economic initiative in Poland between 1989 and 2001. The author also omits to mention a number of problems related to the social cost of the transformation model chosen by the political elite, such as the emigration of over two million citizens seeking a better and faster road to wealth abroad.

Piatkowski’s deliberations upon the early modern period require separate assessment. They are not the result of any in-depth studies conducted by the author. Instead, he compiles data from a single study of Polish historical data provided by Statistics Poland and uses them to support the thesis that it was not the sixteenth or seventeenth, but the twenty-first century that truly is the Polish Golden Age. Piatkowski does not manage to eliminate stereotypical or misguided opinions from his narrative (e.g. that the gentry turned peasants into alcoholics), revealing his limited knowledge of the historical reality in the early modern period. In his attempt to debunk the myth of sixteenth-century Poland as the granary of the West, Piatkowski compares the Polish Kingdom to today’s developing countries and writes: “Poland was not a banana republic, but for sure a wheat republic” (p. 48). Having appreciated the witticism, it is worth clarifying that 90 percent of grain exported from Poland to western Europe was rye. Wheat was neither an important export nor domestic consumption product, hence using data for wheat trade to support the claim that “Poland was […] not the West’s ‘breadbasket,’ as the Polish stereotype maintains” may easily lead to false conclusions.

Sixteenth-century Poland, with its GDP per capita at the level of 53 percent of the average for four most developed countries of the period is described by Piatkowski as backward. Such an opinion appears hardly justified in the light of the author’s further claim that twenty-first-century Poland, twenty-five years after the fall of communism, with its GDP per capita at the level of 60 percent of the average for the Netherlands, Germany and the UK should be described as “Europe’s Growth Champion.” Piatkowski’s historical conclusions are best characterized as falling into the category described by Gregory Clark in his renowned, though also controversial book A Farewell to Alms: “The popular misconception of the preindustrial world is of a cowering mass of peasants ruled by a small, violent, and stupid upper class that extracted from them all surplus beyond what was needed for subsistence and so gave no incentives for trade, investment, or improvement in technology. These exclusive and moronic ruling classes were aided in their suppression of all enterprise and innovation by organized religions of stultifying orthodoxy, which punished all deviation from established practices as heretical” (Clark 2007, p. 145).

 

Piotr Guzowski — economic historian and historical demographer – is the author of two books published in Polish (Peasants and Money in the Late Middle Ages and Early Modern Period, 15th-16th c. (Krakow 2008) and Noble Family in Pre-partition Poland: Demographic Study (Bialystok 2019). Other publications include “The Influence of Exports on Grain Production on Polish Royal Demesne Farms in the Second Half of the Sixteenth Century,” Agricultural History Review 59 (2011) and “Village Court Records and Peasant Credit Market in Fifteenth- and Sixteenth-century Poland,” Continuity and Change 29 (2014).

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Subject(s):Economic Development, Growth, and Aggregate Productivity
Economywide Country Studies and Comparative History
Geographic Area(s):Europe
Time Period(s):16th Century
17th Century
18th Century
19th Century
20th Century: Pre WWII
20th Century: WWII and post-WWII