Poland in Central and Eastern Europe in the 20th Century: Economic Aspects

INSTEAD OF AN INTRODUCTION POLAND – CENTRAL AND EASTERN EUROPE – ECONOMY (OUTLINE OF THE ISSUE)

The presented collection of essays by Professor Leszek Jerzy Jasiński and Professor Tomasz Grzegorz Grosse outlines and analyses the various concepts pertaining to economic cooperation and relations between Poland and the countries of Central and Eastern Europe, and also Western Europe and the United States. The publication complements the previous works from the Poland in the Context of Central and Eastern Europe in the Twentieth Century series devoted to the issue of Polish political concepts concerning the formation of a safe and stable order in Central and Eastern Europe, the history of the Polish economy, Polish trade relations, the geo-economic situation in the region, and its economic thought.

One of the key parts of the presented publication is an in-depth analysis by L. J. Jasiński, comprising twelve chapters and presenting a chronological narrative. The two introductory chapters outline the functioning of Poland as a subject and participant of relations in the world economy and its economic history. For the sake of continuity of thought and to set up an appropriate backdrop for further observations, the author also concisely presents the further history of the development of Polish economic relations in the periods preceding the 20th century. He also complements his historical analysis with a short mathematical introduction concerning ‘the theory of comparative advantages’ (formulated by D. Ricardo at the beginning of the 19th century) with regard to international economics, building economic models, and above all shaping relations in international trade.

After that, L. J. Jasiński goes on to analyse the economic situation of the Polish lands against the background of Europe and the world at the beginning of the 20th century and during World War I, present the economic relations (and Polish concepts of these relations) of the Second Polish Republic, and describe the situation of Polish lands throughout World War II, including the political, social and – in particular – economic effects on the development of the country resulting from the military actions and policies of the aggressors. Then, the author presents the first three years of the Polish People’s Republic, along its ←9 | 10→economic relations with other countries of Central and Eastern Europe, Europe as a whole and the world during the period of Polish Stalinism, followed by an analogous description of the period of Władysław Gomułka’s rule in the history of the Polish People’s Republic, and Edward Gierek’s decade in the 1970s, summed up with the outline of the economic history of Poland – plans, concepts and their realisation – against the backdrop of the region and the world in the period of the decline of the Polish People’s Republic in the 1980s.

As L. J. Jasiński rightly points out in his text printed in this monograph, the economic development of the Polish lands throughout the Middle Ages was not curbed even by the disastrous period of the feudal fragmentation of the Piast state in the 12th–14th centuries. In reality, it was quite the opposite, and the ←10 | 11→increasing cereal yields made it possible to develop animal husbandry, which coincided with an increase in small-scale production and foreign trade.

What is more, the economic development of this small state was hampered by the need to maintain its army, which was disproportionately large in relation to its territory, population, economic capacity, a continental blockade, and the need to repay the so-called Bayonne sums to the French Emperor.¹

After 1815, a new division of Polish lands between the partitioning powers was established, and the process of their mutual economic separation, with their simultaneous incorporation into the economic organisms of Russia, Prussia, and Austria originally initiated at the end of the 18th century, continued. In the Kingdom of Poland, a Russian satellite established in the aftermath of the so-called ‘Dancing Congress,’ we saw a rapid development of the textile industry (mainly in the new industrial centre – Łódź) and heavy industry (in Dąbrowa Basin). Meanwhile, in the Prussian partition in Greater Poland region, we could see the development of agriculture and food industry, while in Upper Silesia, inhabited by Poles and situated within Prussian borders, mining and metallurgy grew in importance. On the other hand, the Austrian partition remained the poorest of all the former territories of the Republic of Poland – this was because in spite of the development of the local mining industry, the Galician economy was based on underdeveloped agriculture, characterised by backward structure.

What is more, it is characteristic that by the end of the 19th century, which brought the enfranchisement in Prussia, Russia, and Austria, the agricultural sector remained a weak point of the economy of both the Kingdom of Poland ←12 | 13→and Galicia. The enfranchisement brought some benefits to the peasants of the Russian and Austrian partitions, but it also increased the number of landless peasants, and the divided peasant farms were not conducive to either increasing or modernising agricultural production. What is more, in the Prussian partition, Poles faced the challenge of maintaining their current state of possession in economic life. The year 1894 marked the establishment of the Hakata – the German Eastern Marches Society – an association supporting the German people in the East, which sought to take over the land owned by Poles.²

Discrepancies in economic development, such as the different pace of the industrialisation processes, diverse technical infrastructure (including railways, which at the beginning of the 20th century were the basic means of transporting people and goods in the three parts of the Polish state), uneven income per capita, diverging laws, different profiles of economic life, and the lack of mutual cooperation between the three separate parts of the former Polish-Lithuanian Commonwealth made their unification after Poland regained its independence a rather daunting task.

In spite of these difficulties, following regaining independence, some significant efforts were made to make these different lands – the previously German Greater Poland with Poznań, Pomerania, and Upper Silesia, the Austrian Western Lesser Poland with Krakow and the Eastern Lesser Poland with Lviv, and finally the Russian Kingdom of Poland with Warsaw and Łódź, and part of the so-called Western Krai, or Eastern Borderlands – a single, cohesive economic organism.

The currency reform of Prime Minister Władysław Grabski was a success. In 1923, the Republic of Poland, which at that time was making heroic efforts to become a truly united, modern, and politically and economically significant state in the region of Central and Eastern Europe and the entire Old Continent, was hit by another disaster.

Disaster is the only word that may adequately describe the hyperinflation of the Polish mark. The successive Polish governments, which initially, facing difficulties in finding funds for all the necessary reforms, investments, salaries, and benefits, resorted to the easiest way of making up for budgetary deficits, namely printing ‘empty’ money, which quickly lost its value were partly to blame for this crisis, which they later unsuccessfully tried to stop and fix the disastrous effects ←13 | 14→of this short-sighted policy. The effect of this unfortunate financial policy, which, however, was mandated by the circumstances of the time, was the loss of control over the state’s monetary system by the institutions responsible for it.