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Paweł Musiałek  1 lipca 2019

The end of Polish transformation

Paweł Musiałek  1 lipca 2019
przeczytanie zajmie 12 min

Are Law and Justice (Prawo i Sprawiedliwość, PiS) voters blind or stupid? That is the primary question resounding among the liberal elite for the last few weeks. The answer is straightforward. They are not. They support PiS not because all their reforms are brilliant, the public television is serving quality content, and the ethical standards inside the party are high. They voted for PiS not for these reasons, but despite them. The question remains: what motivation lies behind the profit and loss balance remaining in the positive for them? What force allows endorsing the greatest fouls by the United Right (Zjednoczona Prawica, a coalition led by PiS)? It is the Poles saying farewell to their awareness of being a country working its way up that must put more effort than others to catch up with the West. Unfortunately, this happened way too early.

A triumph

Let’s call things by their true names. The 45.38% of votes obtained by PiS and affiliates isn’t merely a success. It is a landslide victory. This is the highest level of support not only in the history of this party and not only in the European Parliament elections in Poland but in the entire electoral history of the Third Polish Republic. Nobody has ever been this high: not a single party, none of the coalitions. And it doesn’t matter that no one knows what the European Parliament is for, or what the deputies to be elected on Sunday will be doing there. What matters is a triumph. The psychological one. In this competition, only the gold medal winner is relevant. And so what if the meaning of the game is little known? What counts is the colour of the disc on one’s neck.

The European Parliament elections were supposed to be just a sparring match, a warm-up before the decisive battle: the parliamentary elections in autumn, followed by presidential one next year. Although everyone said that whoever achieves a decisive victory will have it easier in autumn, no one sincerely believed that the difference would be significant. Every insider expected almost a draw with an indication of either side. The warm-up turned out to be the first half of the most important clash. No-one suspected that the blow the European Coalition (formed by many of the opposition parties, led by the Civic Platform party) receives would be so severe that the wounds may not heal by autumn. In fact, it is not entirely certain whether the patient will leave the hospital at all. After all, the scale of PiS victory is overwhelming, and the Coalition’s result – depressing for its supporters.

Sure, not everything is settled. Just as Barcelona could squander its three-goal edge in the second leg of the Champions League semi-finals, Law and Justice can be left with nothing in October. There is still a lot of time to not only stumble over the traps set by opponents but also over one’s own legs. But that’s just a possibility. What we’re dealing with here and now is a landslide victory.

Let’s add – one carried out not by a brand new party. Not by an innocent party that did not yet show their weaknesses. Not by a fresh group, but by one burdened by the hardships of ruling the country. This triumph was delivered by a structure that was formed almost two decades ago and has been in power for four years. Since then, it had to deal with all the holes in a cardboard state, whose weaknesses even the blind could see. It was delivered by a party which receives blows every day from all well-educated and well-mannered people from Poland and all over Europe.

Let’s add that the European Parliament elections are not PiS’s favourite discipline. Due to the electoral law and the specific nature of voting, it is relatively the easiest to lose votes in favour of extremists. But that didn’t happen. The Confederates failed despite having constructed a colourful team, a professional campaign and an accurate, though arousing distaste, selection of topics. They would hit impressively hard, but they did not strike home. It would seem that focusing on the JUST Act 447 simply had to make it – after all, PiS’s soft underbelly on the right wing has been spotted accurately. No such thing. On the right flank, PiS gave up nothing. In the centre, they did not have to fight over the electorate. The fruits were laying on the street. They were left over by the Polish People’s Party (PSL), hesitantly following the anticlericals from the Coalition.

How did PiS crush its rivals? After all, the anti-PiS focus seems exceptional. Both the real and imagined sins were pointed out. Blows fell from both right and left. They were hit from every angle, with every tool available. Even Sekielski’s movie, a documentary regarding the paedophilia problems in the Catholic Church in Poland, did not help. The film shook Poland, shook the Church, but not the voters. „Why?” – asked the liberal journalists. Have the people not seen the fraternisation between the Throne and the Altar? The disassembly of the judicial system? The handing out of privileges to career party members? The international embarrassments? Did they see none of the other sins perpetrated by PiS? Are United Right voters blind or stupid? This is how one might express the major dilemma that sits in their heads. And the answer is straightforward.

They are not. They support PiS not because all their reforms are brilliant, the public television is serving quality content, and the ethical standards inside the party are high. They voted for PiS not for these reasons, but despite them. The question remains: what motivation lies behind the profit and loss balance remaining in the positive for the voters. What force allows freely endorsing the greatest fouls by the United Right?

PiS ends the transformation

Here is the answer. PiS appears to its voters as the party that finally ended the Polish thirty-years-long transformation. To put it precisely: PiS has exceeded the paradigm of effort that society must put into improving its fate. But to understand what we are dealing with, one has to break away from the here and now, and recall the not-so-distant past.

And the past in Polish politics is the transformation itself. The main goals of Polish politics after 1989 were generally perceived to involve joining the NATO and the Union. Close, but no. Those were not the goals but merely means. The goal was the transformation. Scientists will explain it in a language of a complex systemic process. And the case is quite simple, really – it’s about a change that would make Poland more like the West. Pardon. To make Poland become part of the West. This was our point of reference. It was the only one we knew. Hence we would join the Union and the NATO; hence, we would introduce democracy and the free market. We have created the country’s steering wheel (although it is still far from being effective). We have implemented further reforms, including the painful ones.

Consequently, act after act, regulation after regulation, and finally directive after directive, Poland changed beyond recognition. We no longer remember this, so the best witnesses of the era are the Ukrainians visiting us frequently. We started off in the same spot and today we are outrunning them on the third lap.

The Solidarity team had started it, but others followed suit. In truth, the elections were of little importance. Successive ministers of successive governments only replaced the plaques on their doors. Merely subsequent competitors in the political relay-race. After all, the program was known before the election. No Polish party in power ever changed the country’s chosen course. Not because the people wanted it, but because they trusted the Solidarity elites. They did not read the party’s programs, they did not know what inflation or government expenditure rule was, but they believed that those who were in prisons in the communist era certainly knew what they were doing. And that they did it for Poland. The West could not quite believe that Solidarity, a trade union, would dismantle the workers’ expectations instead of defending them.

Of course, this top-down therapy had to channel anger somewhere. The first warning came relatively early, after just a few years, as Solidarity had to give up power for shielding the transformation. But nothing has changed, apart from replacing the elites. Post-communists seeking to legitimise their own existence were a pro-continuation party, not a pro-change one.

The first major warning was Andrzej Lepper, who built his position on criticising the Polish transformation model. The tribune of the people, as he was referred to at the time, came to power consistently over a long period. But his rule was brief, constrained by a three-party coalition and under challenging circumstances. In the end, he lost his strength quickly. Following 2007, the electorate of Self-Defense (Samoobrona, Lepper’s party), but also of the League of Polish Families (another coalition member), were both taken over by PiS, the coalition leader back then. When we think about why there has been an increasing dispute between the PO and the PiS since 2007, it is impossible not to notice this change. The folk-Catholic empowerment shifted PiS towards being a vigorous contestant of the status quo. There were more and more alarm signals, fewer and fewer positive ideas. From the multi-coloured centre-right, the party has become a place for addressing the views of those who think they are being harmed by fate, the Polish state or by other Poles. Those who considered themselves losers in the midst of the Polish transformation.

But it wasn’t the increasingly welfare-oriented and populist PiS that started it. Its rule in 2005-2007 was a revolution, but merely a semantic one. Nothing important happened. In the ministries, laws were written by the same people as a decade before, and maybe even earlier. Suffice to say that even during the first PiS rule, the party had lowered taxes, and many people in the ranks shared moderately free market views.

The first signal of fatigue with continuous transformation was given, paradoxically, by Donald Tusk (then leader of the Civic Platform, an opposition party leading the European Coalition) during their reign between 2007 and 2015. The Platform’s evolution turned out to just as relevant as the evolution of PiS. Tusk turned out to be the first prime minister with no enthusiasm for reforms. He had no ambition to make it to the history books, preferring to observe the history happen from a distance. The Third Polish Republic had seen passive politicians before, but none like Donald Tusk, who would make a virtue out of the peace of mind and enduring for the sake of enduring.

When asked about painful reforms, Tusk would send people to the dentist. Nevertheless, the economic crisis made it necessary to tighten one’s belt. It should be noted that Tusk did so: not because he wanted to, but because he had to. The PiS rustle from 2005-2007 allowed Tusk for a developmental drift without risking social anger. Poland under Tusk was developing, but with the power of its own momentum. The Civic Platform merely greased a couple of gears. Tusk’s major statecraft accomplishment, increasing the retirement age, was perhaps a warning sign. This necessary reform was the last big ambition of the prime minister from Gdańsk. He did not want to bother his fellow countrymen anymore. Nevertheless, the retirement age reform was one of the reasons behind his political camp losing power.

The welfare revolution

After the shift of power in 2015, a revolution came. Not a semantic one, but a real one this time. Excited by achieving an independent majority, PiS politicians have engaged in a turbo mode. The last four years can be summed up with the slogan: down with saving, down with the sacrifices. But there’s more! PiS promised to give the people what rightly belonged to them but what they were refused, because the greedy liberals flocked together with tax mafias were supposedly taking it all away for themselves. PiS was the first party to be concerned not by the issue of where to save, but where to spend.

The Family 500 Plus program was a breakthrough. Many commentators would rightly emphasise with admiration: PiS not only gave people money. It gave them a lot more: dignity. It helped them believe in themselves.

It invited those who so far been left out to join the feast. Those who were formerly excluded, or at least who felt that way, became a part of the national community.

There was no end to common joy. After all, poverty fell to an all-time low. After a time of frustration with the programme, the elites broke too. They admitted, though typically with clenched teeth, that the 500 plus program is okay and that it won’t bankrupt the state. Analysts were baffled how it was possible that nobody had come up with that for 30 years? The best answer to the question of why PiS was the first party to opt for such a substantial financial operation is: because it could. For the first time in the history of the Third Republic of Poland, the state budget was capable of supporting more than PLN 20 billion annually on pro-family or welfare policies without risking the collapse of public finances.

One should admit honestly – PiS deserves a lot of credit for this. By sealing the tax system, they effectively raised the state’s revenue. No, they did not just take away from the fuel mafias, as one can learn from the ticker strips on the state televisions. They also took away from thousands of „ordinary” Poles who, through VAT evasion, had been cheating the Polish state and its citizens. Sealing taxes is the crucial system reform of PiS deserving high praise. This success story is not disturbed even by the intrusive propaganda exaggerating the wealth recovered and accusing predecessors that they did not fight the mafias systemically because they were stealing themselves. One can turn a blind eye on the oppression of the Civic Party members, giving PiS the satisfaction for the hard work they have done. And it just so happens the victim isn’t innocent, either.

But it did not end with the Family 500 Plus. It turned out that the most massive mechanism of redistribution in the Third Polish Republic did not turn out to be the end, but the beginning of gigantic transfers. Most importantly, the money did not only go to those most in need. The PiS trademark is universal transfers, which also went to the richest. Not enough. PiS welfare policy was not limited to giving away more. It began to pick up momentum and also reach areas where it has not reached yet. PiS began to build homes, and even give away school starter kits for children. As a result, the level of spending on welfare has quadrupled.

With more and more transfers, the enthusiasm of even the heavily redistributive economists diminished, and criticism began to appear. It was emphasised that we are giving away too much and not where the money is needed. The latest report by the Institute for Structural Research has even criticised the Family 500 Plus programme, a real jewel in the crown of PiS reforms. Experts have calculated that the supposed goal, the increased fertility rate is minimal and that eliminating poverty would only take 1/8 of the funds spent. The rest could be used to boost the resources for kindergartens or infertility treatments.

The wailing was for nothing, though; the feast went on. The government justified welfare aid not only with social needs but also financial requirements. The Neo-Keynesian policy was to provide the so-called fiscal boost. And it did. Economists would highlight that this fuel is expensive and would expire quickly. It is like keeping a campfire with paper.

A symbolic decision for the Law and Justice rule was the withdrawal of Tusk’s reform of lowering the retirement age. No other decision was a more spectacular example of putting the here and now over what comes in the future. No other decision better shows the end of the sacrifice paradigm. While earlier sacrifices were made in the name of the generations to come, now the decisions are made primarily at their expense.

Importantly, not only the numbers were important, but also the language. The problem is that PiS not only satisfies appetites, it also increases them. PiS began to tell Poles that the fate of people is not in their own hands, but in the hands of the state. That the state will not only support them but will secure them fully. The PiS fault is that it had let the genie out of the bottle and pretends to not know about it. After all, demanding attitudes are hard to tame once they have picked up a pace. This is due to the fact that our mind only tolerates further financial advances, but not a removal of benefits. After all, endless economic growth is unsustainable. The foundations of the world are shaking and with them the foundations on which our development is based. What will happen to the Union, see-sawed by radicals, remains to be seen. As is the case with free trade, which the disrupted by protectionists. To make the picture full, we shouldn’t forget our neighbour in the East, who does not let us forget about the need to improve security constantly. And that costs money.

Campaign – a new quality

Apart from stimulating demanding attitudes, PiS also sinned with pride and manipulation. Prime Minister Morawiecki explained: to have more money in the budget, all it takes is not to steal. There was neither a comma nor footnotes there. And it’s a pity because there weren’t so many thieves and they didn’t steal so much that it would be enough to cover the expenses that PiS had launched. The sealing of the VAT tax loopholes was also not enough to acquire the necessary funds. So where did PiS get those budget billions from? The answer is yet again straightforward: from economic growth. Not only from the years 2015-2019, we should note. Although the growth in that period is impressive, it would not be enough.

PiS is giving away the resources accumulated throughout the entire period of the Third Republic of Poland. Therefore, it gives away the resources accumulated by those whose names it now drags through muck and mire.

Nobody will take Kaczyński’s party’s laurel for being the most generous party in the Third Polish Republic, but one must admit that it doesn’t just spend the money it has earned on its own. It spends funds that the Polish budget would not have, had it been spending so much on welfare transfers from the transformation’s very beginning. Even PiS would not do it. Not because it did not want to, but because it did not have money to spend. So it turns out, it took power at the best time for extensive redistribution. Never before has a party had such a comfortable economic situation where the fruits of three decades long growth could be divided more evenly among the society. For PiS, that was not enough. It only saved enough for dinner and dessert at a cafe but went on the all-inclusive holiday.

Although the scale of redistribution under PiS rule was unique in the scale of the entire Third Polish Republic, PiS decided to break through the ceiling. The Kaczyński’s Five programme announced before the European Parliament elections was the most expensive voter-luring activity in the history of Polish democracy. PLN 40 billion has been divided between the critical electorate was a huge investment, but the return rate turned out to be enormous as well. While analysing the PiS election result, it is impossible not to connect it with massive welfare transfers. This campaign has proven that what attracts voters the most is live cash. Not in tax deductions, not in annual returns, but on one’s account. Every month.

The opposition has caught up on this lesson very soon. The European Coalition’s announcement of maintaining all PiS welfare transfers is the best proof that Polish voters no longer accept the language of sacrifice and hard work. They want stuff. Right here and now. However, the Coalition’s issuing of a blank check for PiS spending did not work. Even more expensive announcements did not help Robert Biedroń’s Spring party, either. In this case, there was no effect, because both the supporters and opponents knew that it was merely a decoration. What really keeps an ex-mayor of Słupsk Biedroń and his electorate awake at night is the fight against Polish conservatism, not the Polish poverty. So PiS has won the welfare race. Not only because its offer was high, but above all, because it was credible. Law and Justice have repeatedly proved that it fulfils the promises. PiS may fail the elites, but not its voters. And vice versa, as the elections showed.

Don’t believe that we have made it to the West

Someone can ask: is that bad, after all? Perhaps we have already achieved what we have been chasing in the 90s? Maybe we no longer have to race anymore, and we can relax and start a barbecue? After all, they aren’t toling so much in the West. They work calmly at their own pace.

Let’s state this very clearly: in many respects, we are not the West yet. One does not need a PhD in economics to understand this. Just look out the window. You may need to lean out a little further in big cities, but a glance at the Polish province will strip you of any delusions. We need to recall what seemed obvious fairly recently. Over the past 30 years, we have been catching up with developmental arrears of at least three centuries.

Where we are is shown not only by the GDP dynamics or unemployment. It is primarily shown by the accumulated wealth. In this respect, we are still working our way up. Unlike the Germans, French or even Italians, we don’t have much to give to our children.

Paradoxically, by copying the laziness of the modern West, we are moving further away from their standard of living. We’ve done a lot of hard work in the last 30 years. But we’re not finished yet. We still have a lot to do. And above all, we need to save a lot to fund investments in new resources.

First of all, to invest in the Polish state. The Third Polish Republic has been successful in building the foundations of democracy and economic development. Unfortunately, it was a failure in building an efficient state. Yes – we did create new institutions, expanded their functions. The state was becoming more and more extensive, but not more effective. This was due to spreading too thin.

The recent years have brought about a revolution in the labour market. Yesterday it was the employer who was in charge, today it’s the employee. One may enjoy it, especially from an employee’s perspective, but this creates a substantial issue for the state. Without an increase in wages, experts, specialists and managers will be treating work in public administration as an internship program before „actual” work in the private sector. They will treat it as a place for them to gain valuable knowledge and see how things are run, and not where they can give their energy and pursue their ambitions.

We must also invest more in knowledge. Today, the share of expenditure on intellectual property in Poland’s GDP is at a much lower level than in the Czech Republic or Hungary, not to mention Western Europe. The low-hanging fruits of the „bonus of underdevelopment”, with which copying foreign solutions was enough, are depleting. The Polish industry has not yet gone through automation, and another technological revolution is fast approaching. If we do not want to maintain the role of sub-suppliers of medium-advanced goods, we must invest in digitisation. The question is, where to find the means for that, if we keep spending everything at a time of peak prosperity, instead of saving?

The investment priority does not mean that all welfare spending should be criticised. We should never turn a blind eye on inequality and applaud Korwin-Mikke, a controversial Polish libertarian. The problem with the PiS welfare policy lies in the fact that by making direct transfers it takes the easy way out. It is easier to transfer money to a bank account than to build a well-functioning education or health care system, providing high-quality public services. In a sense, by giving people cash, PiS deserts from the function which an effective state should be performing. If we absolutely need to make transfers, then they should go where they are most needed and most effective. The extension of the Family 500 Plus to cover a benefit for the first child as well, part of the Kaczyński’s Five programme supported by all parties in the Polish Sejm, will mainly go to families that do not require aid. The funds to be spent on this program could allow health care spending to reach the EU average level. There is no shortage of such examples. It is a pity that the opposition did not write up a competition for a smarter way to spend PLN 40 billion. Instead, it would rather take part in the competition announced by Jarosław Kaczyński and shout: „Not only will we not take it away, but perhaps even add some more”.

No prospects

There is no reason for optimism on the horizon. There is no credible political force that could stop the tsunami. The stakes are no longer about who would reverse the trend, but who would continue it. Moreover, many intellectuals, who would once be writing lengthy appeals in protest against what we now observe, have given up defending common sense. Wartime logic forces both sides to swallow the bitter pill of folk populism.

Of course, after having a few drinks at aunt’s name-day, both groups would occasionally say that this makes no sense, but then hurry to explain – we’ll sort it out once we have won the election. It is difficult for electorates to behave otherwise.

There are a lot of people among PiS, European Coalition or Biedroń’s Spring (Wiosna) voters, who can add and draw conclusions. However, bias against the opponent’s potential attack wins. Where emotions arise, the reason sleeps. Therefore, in this Polish-Polish war, the state of a higher necessity not only abolishes decency, but also an elementary concern for the future, even of one’s own children.

The 2019 European Parliament campaign finally ends the time of effort and sacrifice in Poland. The Civic Platform started a period of lethargy, the PiS topped it up with rescaled transfers, and other parties promised to join the race. We thus say farewell to the narrative of a state working its way up, which must put more effort than others in pursuit of the West. Everything seems to indicate that we are embracing a different paradigm: if we want to be West, let’s spend money like the West does. We’re doing it way too fast. Surely, we will find out about that soon enough.

Polish version is available here.

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The publication co-financed by the Ministry of Foreign Affairs of the Republic of Poland as part of the public project "Public Diplomacy 2019" („Dyplomacja Publiczna 2019”). This publication reflects the views of the author and is not an official stance of the Ministry of Foreign Affairs of the Republic of Poland.