6. Classes and capital in Poland: a capitalist class in transition

Before the combined effects of the class struggle and the economic crisis led to the disturbances of the summer of 1980, the development of capital in Poland had already affected the structures of the various social classes. The ruling class, the capitalist class, consisted of some 200,000 families situated in the Party, the official unions, the administration, and the management of enterprises. This class sought to perpetuate itself by way of personal enrichment (the scandals which the movement exposed in this regard merely touched the tip of the iceberg), by having privileged access (guaranteed by force) to the material goods available through collective ownership of the means of production, and, as everywhere, by reproducing itself as ruling class. As a journalist commented in the August 26, 1980, Tageszeitung,

"the single preoccupation of the people who govern, is their desire to stay in power."

The head of the official unions expressed this candidly on Gdansk television on September 1, 1980:

"When we took power into our hands thirty-five years ago, we did not do it in order to share it with others."

The dividing line between this ruling class and the impatient middle class, which we will discuss later, is probably not very precise, but it is the same as in Western countries. The same class structure was noted in another, already cited, observation from the August 26, 1980, Tageszeitung referring to the strikes:

"The higher one goes in opposition circles, the more one finds willingness to compromise."

Events in Poland can be understood only if one considers this country as a capitalist entity with a relatively weak national capital. This situation made Poland a field for confrontation and collaboration between the two capitalist groups: the West (especially Western Europe) and Russia. The confrontations were principally economic. Investments had to assure a return with an appropriate rate of profit-regardless of the forms. Each of the dominant capitalisms tended to dictate its own terms-which meant it imposed political conditions. Each was interested in the sector of development which would reinforce its own economy and the form of domination of capital within its own borders. This required a certain type of production, certain methods of production as well as social relations appropriate to that type of production.

As always happens within a capitalist class, major social upheavals in Poland provided occasions to rejuvenate the leadership. A new generation of 30to 40-year olds moved up toward positions of authority as a result of "Party reform" (which this group supported largely because it furnished the only opportunity to advance quickly). The capitalist class was rejuvenated: thousands of former "officials" were eased out; they lost their positions and the privileges attached to their power, but they were not sent back to the factories or the mines. These changes took place in a context of clans whose programs were determined by the struggles of inter-imperialist rivals for economic and political influence in Poland. These clans really had no consistent line except to preserve their class power. As Staniszkis observed,

"When far from power, people adopt a critical attitude, but they do not change their way of thinking."

Their temporary options were linked to whichever capitalist group best suited their economic and social position. This was especially true for enterprise managers. A director of the Ursus tractor plant, which is linked to Massey-Ferguson and Perkins, was certainly more "open" to the West than a director of a steel foundry which exported its products to Russia.

This is much less true for political leaders. Although some of them were clearly "marked" by their choice of imperialism, many others were difficult to define because of their opportunism. In the Polish situation, this is understandable: every member of the capitalist class, even if he leaned toward a Westerntype development, had to pay lip-service to Russia, which still controlled the critical economic fields. In their struggle to acquire the power of capital (which in Poland is just as ferocious as the capitalist and bureaucratic competition in the West), these clans needed leverage and supporters; the class struggle, the struggles of the workers and the peasants, furnished the leverage and supporters. In contrast, these clans saw the intermediate bureaucracy and intellectuals (the equivalent of the middle classes) merely as an auxiliary element which was also seeking advancement through the class struggle. When the Polish capitalist class insisted that it was capable of resolving its problems by itself, it meant that, in the context of the economic and social adaptations underway, it would be able to maintain its domination without any "assistance" other than what it already received from the imperialisms to which it was economically and financially linked. Even issues which seemed specifically political, such as the Russian military presence or the dominant role of the Party, actually came within the framework of inter-imperialist rivalries because of the way they were treated by the clans of the Polish capitalist class. When the governments of South American countries started to look more to West European capital than to US capital for their development, the United States, freed from the burden of the Vietnam war, re-established the balance in its favor by unparalleled political and military violence. Russia found itself in the same position in Poland, except that direct intervention would have had more dangerous consequences because the crisis in Poland is to some extent the crisis of the Eastern capitalist system.

In Poland the peasants make up 30% of the population; they are not agricultural workers but small, independent farmers who, by the size of their holdings, their methods of producing for the market, and their habits of consuming their products themselves, could be compared to French peasants at the beginning of the century. On the average, they are quite elderly and their children have had to move to urban centers because the land could not support them. We have already mentioned that the 1980 class struggle aroused the peasants, who had previously remained aloof from the workers’ economic and political demands, but their involvement was due mainly to a single cause, the rapid industrialization of the country during the past ten years, which had shaken up this class. The peasant demands were not so much for the right to form an agricultural union but rather for the guarantee of land ownership--the right to dispose of their land through sale or inheritance--and for access to modern methods of production. (The peasants cultivated 80% of the land but received only 25% of the investments, while the rest went to state farms.) Most of these demands seem to have been met. In France, for example, the unionization of farmers had been a factor, along with mechanization and widespread use of fertilizers, in agricultural concentration which brought about a transition toward production for the capitalist market. In Poland, there were parallels between the peasants’ demands, which were concerned with greater productivity, and demands in the industrial sector which were concerned with similar problems. (In the industrial sector, however, private ownership did not exist, and the "freedom" demanded was for investments through self-financing or bank loans.) To a certain extent, the failure of the plan for industrialization was due to the system’s inability to get the peasants to produce enough food to maintain a low-cost labor force; the explosion of July 1980 was a direct result of this situation. The fact that the peasants entered the struggle also shows that their static situation of the preceding decades had already been left behind and that the impetus toward concentration was under way. The large proportion of private ownership in this sector inclined it toward traditional capitalist paths of concentration. The peasants’ struggle hastened this concentration; this gave rise to other movements similar to those in Western Europe. The kiss of the capitalist class – its recognition of the agricultural union and its providing access to modern techniques-will prove to. be a kiss of death for the peasantry (and also for the Catholic Church, whose power stems mainly from the peasantry). The elimination of the peasants will be achieved by direct capitalist pressure and not by authoritarian bureaucratic methods. The speed of the process will depend on the total development of the economy and on its capacity to absorb both the manpower ejected from agriculture as well as the increased agricultural production. These problems are of utmost importance for the capitalist class since the transformation of agriculture is its key to resolving, "by itself," on a medium and long-term basis, the formidable problems presented by the economic crisis and the class struggle.

In the economic and political crises which intensified throughout 1981 and in the face of the Party’s manipulations of food supplies, the peasants showed that they constituted a distinct class. They continually reduced their deliveries to the state because there was nothing to buy with the money they received, and they said so. As always in such situations, they resorted to a barter economy and turned to the black market. They made almost no attempt to deliver their produce directly to the workers-in spite of the existence of Rural Solidarity and of connections through the Catholic Church. Walesa betrayed his disappointment in an interview with a Dutch journalist on December 5, 1981:

"The farmers think only of themselves.”

In his confrontations with the working class, Jaruzelski took care not to arouse the peasants or to interfere with their harvests. In addition, the values brandished by the general – patriotism, order, etc. – were the traditional peasant values and were those advocated by the Church. This served to legitimize the new regime and to reassure the peasants, the Church’s most devoted supporters. With the bitterness of an idealist, Walesa said in his interview with Playboy at the beginning of December 1981,

"Along with the intellectuals, the peasants are the people hardest to negotiate with. The farmers think only of themselves."

The project of direct management in the Lodz region (which was mentioned earlier) depended on everyone recognizing that it furthered his interest. Industrial products were to go directly to the peasants in exchange for agricultural products. This would have been the only way to organize production autonomously in a non-capitalist context, and it would have meant the dispossession of all the classes that dominated the productive process. This project was not given enough time to show its possibilities.

The working class had been changed by the shift from heavy industry to processing industries. A significant portion of the young workers probably still came from the countryside, but, more than earlier, they were relegated to the assembly line and worked in the more modern industries. For many of the unskilled workers, heavy industry meant repetitive labor. During the events of July and August, it was largely workers from the newer sectors who were the first to rebel while in the more traditional sectors like mining, steel and ship building, workers joined the movement only in mid-August. The former seemed to be satisfied with guarantees on matters of consumption while the latter, particularly the skilled workers, were more concerned about structural reforms leading to economic integration. The dynamics of the development of capital changed the composition of the working class. Some workers might have developed defensive reactions in order to retain certain advantages and this could have led to a temporary understanding with other classes. But, on the whole, the workers’ movement followed its own autonomous development, since the forms of exploitation were constantly changing and the only thing the capitalist class could guarantee was increased exploitation in order to improve productivity and production. Even those workers interested in economic integration could not have achieved it because "there was no basis on which they could have taken part in the decisions." Staniszkis continued,

"This workers’ movement is anarchist in a way, but in the good sense of the term, that is, it opposes all institutions and all hierarchy."

In the modern sectors, where most of the work force is unskilled, the same tendencies were appearing as are found in every society of consumption. It is certain that if capital had attempted rationalization – which would have meant, as some observers foresaw, a significant pool of unemployed – attacks against capital at the workplace would have been extended to attacks on commodities at the marketplace. Some indication of this has already appeared; looting of the stores in Zamosc on May 28, 1981, for example.

Precise information on the middle classes in contemporary Poland is difficult to obtain, but we can get some idea from the importance of the various agencies of control and restraint: the Party, the unions, the Church, the police, the army, the intellectuals, the vast bureaucracies of civil servants and of economic managers. To those should be added the owners of small, independent handicraft and commercial enterprises, who were numerous enough to ask for and be granted their own "autonomous" union; there were about 200,000 to 300,000 of these private enterprises employing five or six workers.

Changes in the economy probably also changed the balance of forces within the highly diverse sectors of the Polish middle class. This can be seen in the fact that, within this class, an opposition group had been able to develop which based itself on the workers’ movement and which, in June1976, openly called for a change in the relations of power. In spite of the repression, this opposition group had not endured severe Russian-type persecution and it had succeeded in establishing and unifying itself on a nationwide scale. It was not by chance that this class was attracted to a form of government similar to bourgeois democracy. The 1980 class struggle aroused these people as well as the more privileged sectors of the working class, which until then had remained quite loyal to the bureaucracy. On July 20, 1980, Kuron revealed that the KOR was receiving many petitions from skilled workers who no longer looked to "management" (the Party and official union) for satisfaction of their grievances. At the beginning of the strike in the Gdansk naval shipyards, all the factory security forces went over to the side of the strikers instead of trying to break up the gatherings. Litynski, who was arrested at the end of August, stated after he was freed,

"The police kept us informed. As the days went on, they supported us more and more."

Staniszkis reported that the July movement was also a revolt of the middle echelons within the bureaucracy, who had gradually been excluded from any role in decision-making. It is probably difficuIt to determine specific causes for this exclusion, but one can see parallels to the movement within industrial structures in the West where trained personnel tend to be ousted from decision-making roles and become involved with demands for participation in management decisions. All these currents appeared in the strike committees, in the union Solidarity and in the subsequent requests for restructuring enterprises. The (London) Sunday Times wrote on October 12, 1980:

"It is not only a battle between discredited hardliners and resurgent reformists but a complicated realignment and settling of accounts involving many different factions and regional interest groups."

Economic crises make class conflicts within capitalist societies very visible. Within each class, clans confront each other and vehemently defend those interests which are threatened by the crisis and by the reorganizations which grow out of it. In bourgeois democracies, a powerful technocratic current appears with the elimination of family capital, the increased control by banks, the expansion of the nationalized sector, the repeated attempts of the state to regulate economic mechanisms. Unions increasingly depart from their original role and become more closely associated with the management of capital, particularly in its modern forms. In Poland, when the middle classes called for "democracy," they all understood it to be on the same advanced level as in the bourgeois democracies. But this seems to have been an impossible demand, since Poland had already gone quite far in abolishing the type of state which is associated with bourgeois democracy. The union was hardly aware that it was centering its greatest efforts on this very same self-management of capital-on direct, economic self-management without the traditional mediation of politics.

Of course it is important, when considering all the talk and all the activities in Poland, to make a distinction between what was simply a project, a momentary concession designed to gain time so as to return later in a stronger position, and what would remain permanently in the class structures and social relations. One thing is certain, that the pre-198O system could not go on. As the economic crisis deepened, reforms became more and more urgent for the capitalist class. Already in January 1981, there was a "small reform" which essentially abolished restrictions relating to employment and ended the determination of aggregate wages by the central planning authorities. This "small reform" aimed at closely tying aggregate wages to increased production (for each percent of increased production, aggregate wages could grow by 0.3%). In a period of crisis like the current one, the goal of legislation like this was to transform workers’ concern for their wages into a general concern for increased production; in practice it resulted only in a wage freeze. The new legislation shifted the responsibility for dealing with wage demands away from the higher echelons of the capitalist class so as to keep wage conflicts from degenerating immediately into political conflicts. Enterprise managers took over the power to decide – according to the specific development of their firm – the aggregate wages, the total work force and the schedules of shifts. Olszowski, one of the economic reformers but a hardliner in political matters, stated on September 21, 1981,

"In the broadest sense, a reform will increase the power of individual enterprises and of the workers themselves . . . An authentic system of economic costs must be introduced; planning methods and top level decision-making mechanisms must be reformed."

At the same Party meeting, another expert, Professor Jan Majzel, declared,

"The basic economic unit in the future must be the individual enterprise. Management would be allotted centrally determined tasks but also be given full freedom to carry them through as well as they saw fit."

The intention was to shift the task of resolving conflicts to enterprise managers, but this did not keep Polish workers from knowing that the firms still depended on directives from the central authorities. It was obviously impossible to reverse decades of development of a collective capital simply by issuing administrative regulations. It was just as obvious that one section of the capitalist class would not even consider resolving the problems of a very centralized capital (as Polish capital was at that time) by cutting it into little pieces, as one would cut a cake. The centralization of economic decisions was not a mere whim of a bureaucratic party hungry for power, but an indication of the extent to which capital had become centralized in Poland. The functions of the central bureaus could neither be eliminated with the stroke of a pen nor simply delegated. Moreover, this was not the goal of either the "small reform" or the "big reform" projected for 1983. Greater participation was to be authorized for the periphery, so that sections of the capitalist class would have more power over secondary issues in the management of enterprises. But there was to be no fundamental change in the centralization of the system. The guidelines for capitalist reform, as defined by a joint Party and government commission in January 1981, did not call for sweeping away the centralized system, but for substituting a different centralism – this time a flexible one – in place of the inflexibility of a rigid mechanism (the system of directives from above).

Greater flexibility was to be achieved by redefining the functions of central planning and by setting up new procedures for accomplishing it. The central plan was to be limited to "strategic" objectives which would be defined by the five-year plan. The annual political and economic plans would determine only the global estimates which were to be reached, not by directives, but by manipulation of "instruments of economic control" (prices, interest rates, import duties, taxes, etc.), and by the so-called "rules of the game" mentioned above, which linked net production to wage increases. In the domain of foreign trade, however, the central authority would continue to set import quotas and to formulate export directives. Regulations for furnishing raw materials were to remain in effect for a time, but eventually they were to be suspended. Directives on investments were to continue, but only to determine what would go to the infrastructures, to industrial projects of a structural nature, to housing construction, etc. All other investments were to be covered either by self-financing or by bank loans. Banking credit, too, was to be free of central control; it would have fixed limits in order to insure some regulation over investments. As for prices, most of the enterprises were to be allowed to set the level themselves within the limits established before the summer of 1980. At that time, an enterprise could fix prices on approximately 30% of all its finished industrial products and on about 60% of so-called "new products" (new items which the firm added to its line).

As for wages, enterprises were to be allowed to raise the level if they were able to reduce the work force involved in production. Managements had been seeking such a ruling, since it would provide more flexibility on wages. The director of a copper foundry explained in October 1980 that

"if management could get more control over wages and employment, it could reduce the work force by 10% or even 15%"

While the capitalist class was hoping to assure the continuation of its leading role by devising a plan to replace its instruments of direct control with more indirect methods, analyses of the economic crisis and conceptions of reform expressed by certain Polish economists were imbued with illusions. The principal target of most of these critiques was centralization and the incompetence of the central bureaucracy. An influential Polish economist wrote in the (London) Financial Times on November 11, 1980:

"Socialism means public ownership of the means of production. What we have to ensure is that the management of those public assets is in the hands of men educated at the Harvard Business School, not half educated bureaucrats in the planning Ministry.”

Such critiques foreshadow reforms like the one proposed by a working group from the Warsaw Planning and Statistics Institute at the end of December 1980. Their suggestions included: abolition of all directives on production and of all financial constraints; reduction of economic administrative personnel by one-half and, if possible, reduction of the actual work force by one-third; reduction of planning commission personnel by one-quarter; the possibility of firms to go bankrupt; abolition of the central government’s right to require the merger of enterprises; supervision of voluntary mergers by an anti-monopoly commission with wide powers; limitation of the central government’s authority over determination of prices to simple approval of increases. These suggestions in no way corresponded to the reality of Polish capitalism. The economic crisis did not arise because of bureaucratic incompetence, nor from poor planning or wrong decisions on the part of the central institutions, but because of the dynamics of the class struggle. All reforms expressed in terms of centralization or decentralization are inadequate, because neither centralization nor decentralization could resolve long-term productivity problems (which are also an expression of class antagonism).

All attempts to decentralize showed very quickly that the managers of individual firms were no more competent than the central institutions to resolve the crisis of profitability of capital. This only confirmed that no capitalist class (nor any part of it, even if it could afford the luxury of an education at the Harvard Business School), was actually able to manage the development of capital or class relations according to its conceptions or will. The capitalist class already sensed its own powerlessness when it tried to closely link its conception of economic reform to the reappearance of workers’ councils and to a new definition of union rights and obligations. Workers’ councils, which had already played a role from 1956 to 1959, were to replace management councils, which were composed of delegates from the Party’s factory committees, officers of the official industrial unions, and factory managers. Councils were now to be elected by the workers; they would be authorized to determine planning in the factory and would have a voice in choosing the director. Union reform was supposed to give unions the right to strike, but complicated arbitration procedures had to be observed before the legality of any strike would be recognized. The union was to have rights of actual comanagement as foreseen earlier in agreements between the strike committees and the government. The unions were also to take part in discussions on basic issues concerning the general standard of living (distribution of national income between consumption and accumulation, areas and structures of investments, price adjustments, determination of principles for setting wage levels, etc.).

A journalist wrote that "slowly Poland is groping its way toward another form of social relations which could be beneficial for other communist countries." The head of Interpress elaborated this point in Der Spiegel:

"The new unions will gain confidence in themselves from the fact that they are an element in the political and social climate of Poland. There has to be a change in the current system, there has to be a change in people’s attitude toward their work and toward participation in a different organization of production; sooner or later, this will be the task of the new unions as representatives of the workers. lf the role of the unions is not understood in this way, it is impossible for a State to function in a society where there is production for the market.”

The question was whether the new structures could even be set up – not so much because of opposition from Russia, the dominant imperialism, but because of internal conflicts in Poland, the class struggle on one hand, and resistance from privileged strata of the established ruling class on the other. This aspect of the proposed economic reform aroused a great deal of interest among the officials of Solidarity because it coincided with their interest in self-management and also with certain practical conceptions of the rank-and-file. One part of the capitalist class did everything possible to hinder the adoption of this reform; even pending legislation for a temporary compromise arrangement was set aside and replaced by a decree. The former system of management would remain in effect through 1982 and there would even be more centralization in certain areas. The allocation of all raw materials and of all materials important in production would remain the monopoly of a special bureau of the state apparatus.

At some regional levels of Solidarity, this setback gave rise to preparations to take over production, which was to be supervised by a strike committee according to a plan elaborated by the workers themselves with a view to social needs. Supervision of distribution was to be set up at the same time. The threat of such a takeover caused as much panic in the state apparatus as it did in the union and among the economic experts. This was going much too far beyond the progressive reform of an economy administered by capitalists. This is the context of Jaruzelski’s announcement on December 25, 1981, that "‘the process of disintegration of the State has been stopped." In effect, he was announcing that all decisions dealing with the economy were henceforth to be made at the top rather than under constant pressure from a rank-and-file movement, and that there was no chance of condoning any rank-and-file action which would deprive the bureaucrats of their power.

Military intervention undoubtedly raised hopes of revenge among ruling Party members eager to settle accounts and re-establish their lost authority. Albin Siwak, a spokesman for Party hardliners, commented on February 4, 1982, "The people who’ve been running this country since the war got the fright of their lives with the rise of Solidarity. They sat there biting their nails in the months since August 1980. Now they want to get their own back." But the extent of the repression and the additional vengeful punishments should not disguise an essential fact: capital still had the same problems to resolve. The military intervention was directed principally against the rank-and-file movement, but it was also directed against opponents of reform projects, even opponents within the capitalist class. The intervention simply replaced a chaos controlled by no one. The December 19, 1981 Le Monde observed,

"What we are seeing in Poland since the proclamation of a state of war is .. .the first attempt to interrupt the continuity of power in a communist country."

Militarization of key sectors of the economy was not for the purpose of intimidating the population. One apparatus replaced another and, as the Financial Times pointed out on December 19, 1981,

"General Jaruzelski’s intervention, however deplorable in many ways, nevertheless offers the last faint hope for the reform movement in Poland." Once Solidarity was suppressed, there was in fact continuity with the reform movement, not only in the declarations of the military rulers but also in their policies: "The government will resolve on its own all the problems which were originally to have been negotiated with Solidarity" (Le Monde, February 10, 1982).

The now superfluous Solidarity was not the only body excluded from taking part in the reform of the system. Many agree that the dominant role of the Party was finished for the time being and that, in the future, the military council, an informal group of military personnel and civilians, would not act on behalf of what remained of the Party, a Party whose basis remained questionable (see the figures cited earlier). On December 30, 1981, a spokesman for the military council stressed that

"it will be necessary to maintain all staff in their current jobs, given the exigencies inherent in the state of war and the difficult economic situation of the country."

Several committees were set up to study projects of economic reform, new political structures (there was again talk of a new national front), and new formulas for setting up unions which would be different from both the official unions and Solidarity. In his short speech of December 25, 1981, Jaruzelski specifically mentioned that “in our socio-economic system, there is room for self-managing and really independent unions" and added that "the chances for national accord could be greater than before." On February 9, 1982, Rakowski further elaborated:

"Authentic, independent and self-governing representation of professional and social interests of the working people should be harmoniously linked with the supreme aim of strengthening the State and socialist democracy.”

Beneath the elegant words, his statement was an admonition for the union to restrict itself to the function assigned it by capital. But the fierce struggles between clans made it impossible to decide on a concrete proposal; some still wanted to seek an agreement with Solidarity, others wanted a new union subordinated to the government. Specific needs of enterprises made it urgent to decide quickly on the status of committees which had been set up on a local level to fulfil certain union functions.

These discussions were not simply academic debates or geared to propaganda: they went together with the drastic measures taken by the military authority as soon as it entered the scene. A profusion of economic rulings had constantly been postponed because of the class struggle and now the military government tried to impose them in the wake of its repressive actions. Beyond their immediate effects – an increase in the level of exploitation resulting from a lowered standard of living as well as an extension of working time---they sought to provide long-term financial and social means to restructure the economy. For this reason, it was soon necessary to go further.

The following measures affected essentially all areas of the production process:

-Average working time of 42 hours a week, Saturday work obligatory and manipulation of paid vacations.
-Considerable price increases on basic food products (between 200% and 400%), on coal, gas and electricity (200%), but smaller increases on industrial products (70%); some adjustments in wages (small increases for low-paid jobs and arduous work such as mining). In this domain, the new regime, at least initially, succeeded in doing what no other government since December 1970 had managed to do.
-Devaluation of the zloty and free circulation of foreign currency to finance selective imports.
-Exchange of goods furnished by peasants for machinery which would not be available until 1983, but at current prices for the equipment.
-Assignment of military commissars to factories in order to assure co-ordination between enterprises, especially provision of spare parts.
-Massive lay-offs which took the form of a political-unionist purge; obligatory jobs in factories and on public works for anyone unemployed between the ages of 18 and 45. (In Lodz alone, forced labor was imposed on 7,000 out of 11,000 unemployed).

This super-technocracy, which used quasi-military methods in the hopes of achieving efficiency, seemed to think that extending the hours and increasing the number of workers was all that was needed to increase production. It also nourished hopes of achieving some degree of economic autarchy, namely of strengthening Polish national capital by means of agricultural self-sufficiency, development of natural resources needed by Polish industry, and reduction of dependence on the West. This is the response of every national capital when confronted by the international economic crisis, but a national capital cannot simply disregard the class struggle in the country it controls, nor its links of interdependence with world capital. As for the class struggle, the central problem in Poland was still productivity, which could not be resolved in the current context of violence, super-exploitation and disorganization of the structures of domination of labor. As for the links of interdependence with world capital, they could be strengthened only if the class struggle could be contained within limits comparable to those in other industrial countries. The struggle of the Polish workers was more than ever the key to future prospects for the national capital, and these prospects were dubious at best, since across the threshold lay the international crisis of capital.

Shortly after the accession of this super-technocracy, Baka, a government minister responsible for economic reform, stated:

"It was necessary to pass through the state of war before this change was possible."

And on February 16, 1982, a member of Parliament regretted that

"for Poland’s history, the imposition of martial law has the ring of defeat for the existing socialism."

Behind the travesty of words, we recognize that the capitalist class really did consider itself defeated and saw that it had to focus its offensive on the workers and on reforming the system, thereby affecting the high status of a sector of the capitalist class that was clutching its privileges; only then could the capitalist class get the workers to pay the price for this rescue of capital. A statement by Finance Minister Krzak on September 15, 1982, defined the situation in much more precise terms. He pointed out the

"other aspect of martial law: it provides a shield for the introduction of economic reform in pricing, in self-financing for enterprises, and in profit and loss accounting . . . These reforms, if they are fully implemented, will add to the power of the Finance Ministry at the expense of the central planning organization."

In other words, with Poland in the throes of a crisis, the government was making a shift toward what could be called finance capital and away from industrial capital.

A list of some of the provisions included in the economic reform initiated in 1982 makes it clear that considerations of capitalist profit were primary:

-State-run companies were free to set prices within categories that covered 10% of consumer goods and 60% of industrial goods;
-They had more freedom to raise workers’ wages;
-They were permitted to set their own production targets except for "operational programs" and "state contracts" which covered 30% of the output;
-They were free to hire and fire workers;
-In cases of bad management, credit was suspended and there was possibility of bankruptcy;
-Anti-cartel legislation was directed against collusion among large enterprises (and such legislation can be trenchant in a "socialist" state). This means the reappearance of competition. In other words, financial requirements took precedence over production requirements – a common response to the crisis in all capitalist countries.

In order to successfully implement this reform in the midst of an economic and social crisis (which, ironically, had made the reform necessary), the rulers had to prevail over not only the workers but over an entire sector of the political and economic bureaucracy. Aside from the repressive machine-police and army-the rulers could count on only two allies. One was the Party, which itself was in great disorder and which served as refuge for the ousted section of the capitalist class; the other was the Church, which was in a position to cash in on its power. It is significant that both allies had strong ties with world capital; the former, with the Eastern branch, the latter with the Western branch. This meant that Polish national capital had to make its mark not only in exploiting the workers but also among the competing imperialisms, whose presence was felt not only in penetration of capital or commodities, but also internally, in the active factions of the capitalist class itself. At this point the Church took over the role that Solidarity had not been able to play-even though the Church was itself an integral component of capital. The Pope’s visit in 1983 was a recognition of this situation. Statements made by the rulers after the military coup always recognized this role of the Church. Rakowski stated in the February 15, 1982 Newsweek, "We treat the Church seriously as a partner shaping Poland’s future;" and in an interview with Fallacci (reported in the (London) Times on February 23, 1982), "they (the Church) need us as much as we need them."

Again on August 24, 1982, he reiterated that the Church "is an indispensable element in the social and political relations of our country," and added that dialogue "had never ended and still continues." In fact, the Church was an important link in the system of domination because, in addition to possessing real power, it retained great influence among the peasants and workers with a peasant background. And as was the case in Spain under Franco and in Poland in the period before July 1980, the Church served as refuge and rallying point for opponents of the regime. For the workers, because of its position in Polish society, it directly and indirectly provided a substitute for the non-existent union. The Church appealed for calm on behalf of the regime just when its role as rallying point of the resistance was giving it the status of opponent. The Church’s ties to the peasants were stronger and more important for the system. Peasants make up one-third of the population and the new economic policy needed to manage them so as to achieve self-sufficiency, a crucial element for "economic recovery." It was not by chance that the leader of Rural Solidarity joined the new official peasant organization. In September 1982, the government conceded an important point; it guaranteed inheritance of the land for peasants farming their own land and it permitted the size of private holdings to increase from 30 to 100 hectares. The government also took measures to provide more agricultural machinery. In the long run, these were policies which would lead to agricultural concentration. It did not even seem strange to see the Church (itself a landowner with extensive holdings) negotiating with the government for the establishment of a sort of ecclesiastical bank (with funds coming largely from West Germany) for the financing of agriculture and small private industry, so as to encourage cooperation between the two.

After two years of various measures to get the machine working again, what could be said about the Polish economy? In 1980, industrial production declined by 6% in relation to the previous year. In 1981, the gross national product declined 13%, industrial production 11.2%, trade 20% and investments 26.7%. In 1982 there was a further decline of gross national product by 2%, industrial production 10.7%, trade 5% and internal consumption 20%. In the first two quarters of 1983, industrial production rose 12%, trade 6% and internal consumption 22%. At first glance, it might seem that things "had returned to normal" but the 1983 figures indicate that there was a return only to the situation of 1981, the year with the most unrest, the year which preceded the December coup. Also, after examining the data closely, one can see that a large part of the recovery came from extractive industries, particularly from increased coal production, and this was due to the modernization of techniques during previous years, the compulsory extension of the work week, and the addition of 20,000 more miners while those already working in the mines were forbidden to change jobs. Another part of the recovery came from various measures such as the one introduced by the Church. New ways for introducing foreign capital were found; investment of foreign capital was permitted in small enterprises. In 1982, more than three hundred of them were set up and their production jumped by 500%. They were exempted from taxes for three years and were allowed to export 50% of their profits. Some of them had as many as one hundred employees and the high wages they offered attracted highly skilled workers. Another example was the employment of Polish workers in foreign, largely German, factories.

These developments indicate that the central aim of the new policies – to lower wages in order to increase surplus value – continued to be unrealized due to the interrelated effects of economic chaos and the class struggle. The most modern sector of the economy attracted large amounts of foreign capital in the expectation of handsome profits, but it operated at barely 60% of capacity. A typical example was the Ursus tractor factory in a Warsaw suburb. Equipped to manufacture modern Massey Ferguson tractors and Perkins motors, it produced only a few hundred of them, whereas it had previously supplied Polish agriculture with tens of thousands of old-model tractors. For various complex reasons--the class struggle is one of the central ones – international capitalist . competition was a severe shock to capitalist Poland. The December coup caused a sharp decline in Poland’s standing in the hierarchy of industrialized countries. Drawing its subsistence from extractive industries, operating obsolete high-tech plants which manufactured only out-dated equipment for internal use, relying on agriculture and small industry, and letting a black market grow out of control, Poland in some ways resembled an underdeveloped country rather than a modern state even though it had the industrial structures of the latter.

The economic impasse was intensified yet further by resistance from the bureaucracy. One sector of the capitalist class had no interest in making any change whatsoever, since these people clearly saw that it would eliminate their positions of authority. This sector’s conceptions of management were those of another era and were completely inappropriate for modern industry, and even less suited to an economy in crisis. In an interview in the January 10, 1983 Newsweek, Rakowski claimed: "During the last two years we changed from 70% to 90% of the managerial staff at all levels. They are new people.” This was far from obvious, since in October 1982, a governmental report stated that the authorities were "finding it hard to overcome the deep-rooted conservatism of the country’s bureaucracy," and on April 22, 1983, a different official report called for energetic measures to encourage the central bureaucracy to restore its dominant position, which had been undermined by policies of decentralization.

The clout of this bureaucracy is evident from accusations of sabotage of the economic reform, and it is more concretely illustrated by the "revision" of a list of 550 enterprises which the banks had marked for bankruptcy; in the end the number was reduced to fifty. Of course one might interpret as an indication of confidence in the recovery the fact that in September 1983, 452 of the 1600 projects that had been cancelled in 1981 were reinstated; a year earlier, October 29, 1982, a report to the Political Bureau spoke of "recession and collapse of the economic equilibrium, of weariness, of apathy, of passivity, of little confidence on the part of the workers, of confusion within Party ranks and of lack of cohesion in the ruling bureaucracy." The explanation of this apparent contradiction is that Polish capital, with the help of international capital, was condemned to forge ahead in "the hope that the economic reforms would improve conditions sufficiently to dissolve the discontent" (as a 1982 report of the Experience and the Future technocrats put it). In other words, Polish capital was counting on assistance from international capital and on the isolation of the Polish workers.