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By VICTOR PERLO

Poland’s economic problems arise from a series of
developments and policy decisions, connected to one
another, that have resulted in economic problems:

¢ Very rapid increases in wages and farm in-
comes far exceeded increases in productivity. Be-
tween 1970 and 1977 average wages more than dou-
bled, increasing 108 percent, and peasants’ incomes

increased at a comparable rate. Meanwhile produc--

tion per employed person increased only 58 percent.
That is a very high figure, showing that there were
great advances in the Polish economy. But the in-
creases in wages were much faster than could be sup-
ported by increased production.

_ © Polish agriculture is mainly non-socialist, con-
sisting of small farms with low productivity of labor.
The peasants, paid good prices for their produce and
aided in various ways by the state, consume a larger
share of the national income then they produce.

¢ Poland pays a high price for the foreign cur-
rency it gets from tourists and from remittances to
relatives in Poland. While the official foreign trade
zloty exchanges at alittle more than 3 to the dollar, the
tourist and remittance rate is 33 to the dollar.

Many people of Polish origin live in the United
States and other capitalist countries. With the zloties
they get as tourists or supply through remittances to
Telatives in Poland, they and their relatives drain off a
disproportionate share of the available supplies.

Poland embarked on an extremely ambitious capi-
tal investment program in the 1970s. Productive in-
vestments increased two and a half times between
1970 and 1975. Part was financed by credits from the
Soviet Union; more was assisted by borrowing from
capitalist banks. Loans increased further during re-
cent years when Poland had to import large quantities
of feed grain to continue providing for the rapidly
rising food consumption of the population in the face
of a Series of crop failures. By now Polish debts to
capitalist banks amount to about $20 billion, which is
one-third of such debts owed by all socialist countries
and far more, compared to its size, than the debts of
any other socialist country.

The annual interest burden on the debt comes to at
least $2 billion, taking up a sizeable share of the $6-7
billion in foreign currency Poland gets from exports
to capitalist countries.

The Polish economy fared badly in 1979. Much in-
dustrial production was lost during the extremely se-
vere winter that hit much of Eastern Europe and the
USSR. Drought caused a drop in farm output. For the

* first time since the establishment of socialism, the

real national income of Poland actually declined. Ob-
viously the country could no longer afford very rapid
increases in living standards. Indeed, because real
incomes had increased more than could be supplied
out of current output, a temporary retrenchment be-
came necessary. *

During the 1970s, the government increased prices
of many consumer goods in order to reduce the excess
of consumers purchasing power over the supply of
goods. But prices of meat and basic foodstuffs were
kept down, with increasing subsidies paid to the peas-
ants to cover the excess of what they received over
what workers paid.

Meat became a big bargain in comparison with
other items. Per capita consumption of meat in-
creased from 42.5 kilograms a year in 1960 to 53.0
kilograms in 1970, 70.3 kilograms in 1975 and 73 kilog-
rams in 1979. The explosive increase in meat con-
sumption brought it well above the level in the USSR
and in most countries of Western Europe.

But this year meat output was curtailed because of
last year’s drought. And simultaneously Poland had
to increase exports of its famous hams to help finance
its foreign trade. So a modest and temporary reduc-
tion in per capita domestic meat consumption became
necessary. The government tried to achieve this by
selling moreinthehigher priced commercial shops. If
not through higher prices, the reduced supply of meat

would be affected through shortages in the stores.

Speaking at the end of 1979, Communist Party
leader Edward Gierek explained to the Polish people
that it would be necessary to increase exports to-the
capitalist countries so as to end the increase in the
foreign debt, and that some temporary reduction in
per capita real incomes would be necessary.

Carrying out that program has been hampered by
the economic crisis in the capitalist countries, which
reduces markets for Polish exports and leads to lower
prices received for some Polish export commodities.

Benefits from earlier investment programs help to

overcome these difficulties. In many cases, loans to
Poland were connected with ‘‘co-production’’ ar-
rangements, whereby parts of the output of new
Polish factories and mines would be sold under long-
term contracts to the lending country. And Poland
actively engages in providing industrial equipment to
Iraq for oil, to Brazil for iron ore, etc.

Vic Perlo is head of the Economics Section of the
Communist Party USA.

‘Economics of Polish strikes

Polish industrial production increased 10 percent
in the first quarter of 1980. According to U.S. News and
World Report, the Soviet Union advanced a loan of $1
billion to ease the situation, although there has been
no official report of such a loan. Arrangements were
made for substantial additional credits from a consor-
tium of West German banks and a consortium headed
by the Bank of America, Lloyds Bank of Britain, and
Soviet-owned Moscow Narodny Bank.

With restraint in domestic production and con-
tinued good production results, economic balance
could be restored and the earlier advance in living
standards resumed, but at a more sustainable rate
than formerly. However, the prolonged strikes in the
Polish shipyards affect a particularly vital industry.
Exports of vessels pay for a significant part of Polish
imports of feed for agriculture, consumers goods and
capital equipment needed to meet the peoples’ con-
sumption requirements.

Presumably the strike settlement will include
wage increases and other economic concessions.
However, itis not clear where real material gains will
come from. Poland has no capitalist class which en-
joys soaring profits while real wages decline, asin the
United States. There is no reserve army of unem-
ployed and 25 percent idle capacity that could be put to
work to increase the supply of consumers goods.
There are no farm surpluses — as those regularly
destroyed in the United States — which could be di-
verted to increase the supply of foodstuffs. There is no
short-run solution to the inefficiencies of small-scale
private agriculture.

__ For.the long run, a shift in emphasis from capital
investment to consumers goods may be desirable. But
there is nothing to be gained from cutting of projects
in mid-stream — machines cannot be converted into
meat — and presumably the investment projects aim

_ either to increase capacity for consumer goods pro-

duction or to provide commodities that can be ex-
changed for consumers goods.
In past crises, the Soviet Union has supplied Po-

land with material aid necessary to satisfy striking
workers. Perhaps strike leaders aré counting’on this.

Or on the procurement of new credits that can be used
to import extra food and consumers goods.

_ That, however, would result in delaying a balanc-
ing of the economy and, possibly, create conditions for
a repetition of the current problems. The only real
solution is to convince the workers that it is in their
best interests to cooperate with the government in
balancing the economy. This can be achieved by con-
vincing the workers that they have a real stake in the
successful operation of the publicly owned eco-
nomy. (

Broadbent, Cassidy should have stuck to home

For downright impertinence,
Messers. Broadbent and Cassidy
came in for top honors this Labor
Day. —

_ The working people of Canada
find themselves face to face with
the most difficult problems since
the Hungry Thirties: mass lay-
offs, plant shutdowns, out-of-

_ sight prices, a housing crisis, in-

flation and nothing but promises
of more of the same, and worse.

In these circumstances work-
ers had every.right to expect labor
leaders to come out swinging at
Labor. Day rallies, demanding
new policies and new govern-
ments to change things around

and place the cost of this crisis on

the monopolies.

Some of them did that. Jean-
Claude Parrot put the respon-
sibility for the crisis right where it
belonged, on the shoulders of the
big corporations. He called for ac-
tion by the working people and all
democratic Canadians to turn this
situation around.

Wally Majesky, president of
the Metro Toronto Labor Coun-
cil, and executive board member
of the Canadian Labor Congress,
promised big business a hot year
of struggle, which would pale in
comparison with the actions of

the labor movement in the Oc-
tober general strike of 1976.

Dennis McDermott, while less
than living up to the promises of
the Canadian Labor Congress
convention, dealt with the major
issues before the trade union
movement. .

It remained for Michael Cas-
sidy, Ontario leader of the New
Democratic Party, and Ed
Broadbent, federal leader of the
same party, to use the occasion to
attempt to divert the attention of
Canadian workers from their
problems by inviting them to bask
in their superior ‘‘freedom”’ over
their Polish counterparts.

At the time when the attention
of the Canadian working class
needs to be riveted on their
monopoly oppressors, and the
total unity of the labor movement
is required to organize the kinds
of struggles needed to win vic-
tories against these enemies of all
the people, the NDP leaders offer
division, internecine warfare and
certain defeat.

* * *

The final chapter to the events
in Poland has not been heard by
the people of Canada. This col-
umnist suggests that when it is, it
will read not at all like the bilge

pumped out by the big business
press during the critical events in
Poland.

In the meantime, it would be
quite advisable for the labor
movement in Canada to wait to

-hear the workers’ side of the

Polish events and to concern itself
meanwhile with uniting its ranks
to win victories on the home
front.

The NDP has a perfect right to
its opinions, however right or
wrong. It has likewise a right to
express those opinions on its own
platform and before the press.

I suggest however, it has no
right to abuse the privilege of the
platform of the trade union
movement to introduce divisive,
ill-conceived, and in the end
wholly inaccurate ideological
polemical matters.

If Broadbent had taken the time
to attend the entire Canadian
Labor Congress convention,
rather than sashay in to address
the delegates then leave, he might
have observed how out of place
his red-baiting remarks were at
that Parliament of Labor. Perhaps
then he might have spared the

workers his equally uninspiring -

comments on Labor Day.

Accustomed as they are to the
sick and distorted mirror of
Canadian parliament and the On-
tario legislature, Broadbent and
Cassidy obviously mistake this
bourgeois environment with the
real world in which Canadian
people work and live. How else
can one rationalize their mis-
directed remarks.

* * *

Canadian workers have ob-
served the events in Poland. They
will learn, if they do not already
know, that the right to strike al-
ways existed in Poland. Haven't
the workers just exercised it?
They were able to observe the
great:gains made by a small prop-
ortion of the trade-union move-
ment in a relatively short strike.
Most of them wish it were so easy
in this country.

The Polish strike would have
been completely illegal in Cana-
da. Police would have moved in,
the state would have levied mas-
sive -fines. Governments would
have passed additional legislation
ordering the workers back to
work. All hell would have broken
loose. If you don’t believe me ask
Jean-Claude Parrot.

What happened in Poland?.

Government leaders were dis-
missed. Party leaders were re-
moved and replaced, state and
party leaders met with the strikers
whose legitimate grievances were
met.

Most Canadian workers, in-
cluding Saskatchewan workers
who are denied the right to strike
by the NDP government or long-
shoremen and other workers or-
dered back to work by legislation
which Broadbent voted for, may
see something of interest and
value to them in the Polish events.

Broadbent and Cassidy would
do well to ask themselves how
they find themselves in such har-
mony with President Carter and
Ronald Reagan. Perhaps when
they find the answer to that riddle
they may start better serving the
cause to which they lay claim.

PACIFIC TRIBUNE—SEPT. 12, 1980—Page 5

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