Strengthening the social dimension of economy and developing the social entrepreneurship: an alternative to the crisis in Poland
| Autor | Kazimierz Korab |
| Cargo del Autor | Prof., PhD, sociologist (history of social ideas, history of Polish sociology, sociology of politics) The Bogdan Janski Academy (rector), Warsaw, Poland |
| Páginas | 165-185 |
Page 165
The economic crisis which erupted in 2009 reached most countries. Essentially financial, it was said to result from the faulty financial institutions and banking policy.
Although the crisis touched the most economically strong countries, among others Eurozone, Poland was one of the least-affected coun-
Page 166
tries, turning out to be a «green island». While the key indicators of the economic growth plummeted, they still remained the highest among the EU member countries. However, crisis consequences have finally reached Poland as well.
When integrating the social dimension of the financial crisis, its analysis cannot be restricted to a simple statistical description of the economic activity. Let’s take an example. According to the report of the Central Statistical Office, the general financial condition of private companies was sound. In 2011, companies over 10 employees totaled PLN 134.0 bln in gross profit, 6.1% more than in 2010. In net profit, they totaled PLN 110.3 bln, 4.8% more than in the previous year. Their profit for the year in: from sales of products, goods and materials were in the order of PLN 135.3 bln, 13.8% higher than in the previous year1.
One could paradoxically conclude about the redundancy of social dimension in the economic and financial analysis. However, it would be untrue for several reasons. The statistical analysis quoted has taken into account companies which stayed in the market. That sort of mistake committed when basing the health condition of the population exclusively on healthy people, or alternatively, the condition of vehicles on properly functioning cars alone. The mistake would be repeated if one considered solely hospitalized patients or defective cars. Both are necessary. Therefore, the proper economic analysis should consider not only the financial and economic dimension, but also others, especially its social aspect.
The above-mentioned highly optimistic, statistical description has been completed by the Coface Insolvency Report in Poland for 2012, published in 2013. The rate of bankruptcies in Poland was constantly increasing for the past 8 years with its peak in 2012. While insolvencies are nothing special in market economy and happen most often in the most developed countries, it is worth noting that in recent years in Poland, its rate has been constantly on the rise.
Page 167
Chart 1. Type of bankruptcy in Poland
Source: Coface Insolvency Report in Poland for 2012.
The Report reads that the construction industry suffered from the highest rate of insolvencies throughout the 2012. Courts declared bankruptcy of 218 construction companies, which represents an increase of 53% y/y. Bankruptcies of construction companies in 2012 accounted for 25% of all insolvencies, while two years before, its share was slightly above 10%2. The authors of the Report believe bankruptcy was provoked by steadily increasing payment delays, which implies the financial nature of the crisis.
In Poland, three categories of crisis victims can be distinguished: individuals, private companies and the state budget. Losses of the individuals are due to unfavorable bank loans (unfavorable customer contracts, exchange rate fluctuations, the Swiss franc in particular), the general impoverishment of the population and the rise in unemployment triggered by, among others, slowing economic growth. Companies generate less profit or even go bankrupt due to unfavorable bank loan policy (e.g. non-acceptance of loans guaranteed by the state) and irregularities in functioning of national treasury and penal institutions as well as bureaucratic obstacles. It appears, however, that the state is the greatest victim, with its fast-growing national debt and an increase in public finance deficit and current account deficit (according to the Civil Development Forum, 2013 was closed with PLN 950 bln of public debt). In July 2013, Donald Tusk’s government suspended the first safety threshold. At the same time, banks are doing well. Although the number of loans decreased and statutory regulations intro-
Page 168
duced various security restrictions and limitations, the word crisis does not apply to banking.
Most banks present in Poland belong to foreign capital. Banks as well as foreign companies represent many positive features, but once cannot forget about their negative role: funds transfer to their parent institutions abroad. Reduction of money in national circulation does not boost the economy. Moreover, they are almost exclusively profit-driven and do not fund any social activities or research (although the phenomenon has entered its infancy, as exemplified by Santander).
The historic battle for the social dimension of economic activity features two distinct approaches. In the 19th and 20th century, they occurred in two stages however, recently, they have run in parallel. First, the war was waged on the social dimension of each and every form of economic activity, and only recently, attempts to create a distinct type of social enterprise have been undertaken.
The first stage featured two theoretical and ideological orientations, the former expressed in economism, the latter in an integrated approach. Economism (the so-called single-factor theory) reduces economic activity to the purely economic dimension, and in its extreme form, considers the economic factor crucial and decisive in all human life domains, hence its reductionist nature. In contrast, theories which apply an integrated approach underline the multidimensional character of economic activity, as human engagement into economy derives from various motives.
The history of Poland, as of other similar countries, distinguishes three different stages of the reign of economism and three forms of contrasting integral approach.
The history of the Polish interwar period contains three key facts. In 1918, Poland regained its statehood after 123 years. While whole Europe was focusing its efforts on restoration after the World War I, in 1920, Poland was
Page 169
forced to lead one of the deadliest wars against the Red Army3. After the two wars, Polish economy was devastated. Galloping inflation was shooting up. Two forms of economism dominated Europe. The continent was ruled by liberalism as ideology of capitalism, but the growing influence of socialism was already visible. Meanwhile, Poland, besides two prevailing orientations, adopted also the integral approach. I will restrain my analysis to two cases: Edward Abramowski (1868-1918) and Wladys?aw Grabski (1874-1938).
In the social economy of today, Edward Abramowski’s achievements are by far the greatest as his ultimate goal was to create a Polish «cooperative republic». Opponent of the socialist and liberal solutions, Abramowski advocated the sindical-cooperative approach in all human life domains and at all levels of state which was said to turn Poland into a great, truly democratic cooperative republic, made up of individual co-operatives, societies and associations4. His example represented the extreme perception of reality through the prism of the social economy.
In the 19th and early 20th century, such understanding of an integral approach to business was widespread, as exemplified by the «commercial company» in Liskow, founded by Father Waclaw Blizinski (1870-1944) or «Kasy Stefczyka», founded by Franciszek Stefczyk (1861-1924) and based on Raiffeisen cooperatives.
In the integral approach, however, the most important figure was Wladys?aw Grabski, not only an outstanding researcher of several social sciences, but also a minister and a Prime Minister, who prepared and implemented the program of economic and state reforms. To enable their implementation, on 17 December 1923, entrusted by the President S. Wojciechowski, Grabski formed non-parliamentary government consisting of professionals, becoming himself Minister of the Treasury. The government of the parliamentary majority, conducted one of the
Page 170
most extensive and successful reforms of those days, not only on Polish but also European scale. Their success relied equally on the tailored economic projects and their deeply social roots. Grabski rejected the liberal recommendations of the Ernst and Young Group for the sake of social economy.
Grabski’s currency reform was conducted in the conditions of long-lasting hyperinflation. The exchange rate of the Polish mark (mkp) fell from 9 mkp for 1 U.S. dollar in 1918 to 6 375 000 mkp per 1 U.S. dollar by the end of 1923. Grabski introduced a new currency called the «zloty», and led to the establishment of The Bank of Poland. Moreover, he conducted fiscal and tax reforms, balanced the state budget, developed the custom system and introduced a number of economic development mechanisms. He conceived the currency reform as one component of the economic reform which, in turn, was as an essential element of state sovereignty and development factor of social life until the World War II.
Wladyslaw Grabski’s reform rejected the principles of liberalism which as an ideology of economism proclaimed universality. Grabski founded his concept on the multi-dimensional analysis of the economic life and so...
Para continuar leyendo
Solicita tu prueba