Emerging 3 Poland and Capitalism.. 4 Varieties

 

Emerging Model of Capitalism in Poland

A tentative application of DoC framework

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!


order now

 

 

 

 
 

 
 
 
 
 
 
 
 
 
 
 
 
 

 

 

Contents
 
Introduction. 2
Evolution
of Polish Economy. 3
Poland and
Capitalism.. 4
Varieties
of Capitalism Approach (VoC) 5
Diversity
of Capitalism Framework (DoC) 6
Balcerowicz
Plan. 7
Conclusion. 7
References. 9
 

 

 

 

 

 

 

 

 

 

 

 

 

Introduction

 

Post-communist communism
made its way in European Economy by the middle of 19th century. Poland
was under soviet communist dominance after World War II and during that period
it followed a centrally planned economic model. Even though the government
significantly helped in shaping up the polish market, the economic model that
was followed didn’t work well and the lack of basic products arose and the
country had to face inflation, poverty and debt.  The round table agreement which took place in
1989 brought economical changes and transitioned to a communist economy. Now,
the economy is said to be a free market but still faces problems such as
involvement of government, social welfare and privatisation.  As of today, Poland is the 6th
largest and is considered as the fastest growing economy with a growth rate of
6%. Poland’s Capitalism turned into a political system and made huge impacts
over Central and Eastern Europe. The communist planning system got collapsed
and created severe issues in the Central and Eastern Region of Europe and this
developed questions regarding the management of transition as there is a need
of better market economy. Numerous theoretical perspectives were developed to
address the emergence of capitalist behaviour in Central and Eastern Europe.
And over this, different models got labelled and these frameworks were extended
to find the connection between capitalist behaviour (Próchniak, et al., 2016).

Market economy of Western
Europe got compared with that of Central and Eastern Europe and certain
analogies were created over this. But this didn’t make any changes as there
were huge differences between the market economy structures, considering the
two areas. And this is due to three main factors. The prime factor is the lack
of capital. This created instability in the structure of political system. Weak
civil society was the second factor that affected the European countries in
market economies. The development of new member states in the European Union
made impact and this can be regarded as the third factor that made it difficult
to accept the Western market economy in Central and Eastern Europe (Rapacki, 2016).

This lead to major studies
and as a part, comparative capitalism emerged. Comparative capitalism analysed
the market economy of Central and Eastern Europe and this made capitalism as a
much broader concept than earlier. Transition economies got included as a part
of the comparative capitalism and three possible approaches were developed on
basis of this. These approaches are:

Ø  Direct application of
standard frameworks

Ø  Extension of standard
frameworks

Ø  Non-standard approaches

Direct application of
standard frameworks can be categorised according to different studies. Martin
Srholec and M Knell in 2007 created a VoC methodology and this included details
about all the transition countries and about its dychotomic topology. The same
methodology with minor modifications got defined in 2006 by Hanson. Another
variety of VoC methodology got created in the year 2010 and this considered the
new members of European Union from the Central and Eastern Europe for the
analysis. This is created by Pavol Babos. The final one under this category is
a DoC one and this is made by comparing the respective features of Poland and
Ukraine in the same time.

Considering Poland and its
capitalism, direct application of standard framework could be used. Dr. Vlad
Mykhnenko, an associate professor of Sustainable urban development developed a
comparative study on Poland and Ukraine considering the capitalism and this
categorized the comparative capitalism into a broader category of DoC
methodology. This framework got developed in the year 2005 and was considered
for direct application.

Evolution of Polish Economy

 

Poland is a part of
Central Europe and it is bordered by six other countries. Poland got invaded by
Nazi Germany and then by the Soviet Union. 
The Soviet Communist Dominance over Poland was a result of the Second
World War. With that, Polish economic system got diversified and then it
accepted centrally planned economic model. The Government made major decisions
in the development of market economy in Poland. But later, this model got
degraded due to the lack of basic products. This compelled the government to
make changes in the economical behaviour. And this resulted in major defects
such as the rise of sudden inflation, poverty and the development of huge
debts.

To overcome this, Leszek
Balcerowicz, a Polish Professor of Economics created a plan. This plan is
widely known as Balcerowicz Plan or ‘Shock Therapy’ and it was developed to
transform the communist economy into a capitalist market economy with central
planning. This made revolutionary acceptance in the polish people and it made
positive impacts for the difficult scenarios in Poland. There is a total of
eleven acts in this structured plan and it resulted in the prosperity if the
country. This turned the economy into a much free version but when there is
deep analysis, there is struggle. The involvement of the government in these
markets is one such struggle as there is a lot of privatisation. This regards
to the conflict between socialism and capitalism.

Poland and Capitalism

 

Neo liberal capitalism was
the first to occur in Poland and this encountered in 1990s. This was termed as
the emergence of capitalism in the Central and Eastern Europe and Corporatism
got benefited in this period as there was an expert neo-corporatism approach.
In 1970, neo-corporatist approach got a wider vision. The rise of inflation was
the major concern then, regarding the developed economies (Aleksandrowicz,
Sonntag, & Wielgohs, 2009). Capitalist
societies got coordinated and this created conflicting interests in labour and
capital to a greater level. Until then, socialism was considered as the biggest
boon in the state of Europe. But with the evolution of neo-corporatism, social
democracy ideology lost its way and people created a much fonder approach towards
the capitalist behaviour (Ost, 2000). And this
made a much broader approach to the policies created by the neo-liberalist
corporation and thus it got expanded over the political framework in the
country.

The other side of the coin
created many issues too. When one side of neo-corporatism made major
development in the country, as an analysis of emerging Central and Eastern
Europe Capitalism, it encountered some problems. Privatisation got developed
and it regarded in competition between private organisations. And since there
was no voice for the socialist economy this made conflicts in the economy (Iankova, 2010).

Varieties of Capitalism Approach
(VoC)

 

 After the neo-corporatism, an extended model
of Capitalism got created and this was the Varieties of Capitalism approach
developed in the late 1990’s. This extended version is developed to clear all
challenges regarding the capitalist behaviour in the Central and Eastern Europe
states. Major approaches were developed and frameworks got created by different
economists and professors all around the country.

An approach in 2001
created by Hall- Soskice focused on the Variety if Capitalism theory and
created analysis by providing a comparative study over capitalism. National
Political economies got compared to the capitalist movements in this theory and
created a comparative analysis. Liberal market economies and coordinated market
economies got analysed here in a comparative mechanism.

AN extended VoC approach
is then designed by Bob Hancke, Martin Rhodes and Mark Thatcher in 2007 and
this is the much revised version of Hall-Soskice theory. And this approach got
accepted in the post-communist era as it have applied better analytical
framework considering the Central and Eastern Europe capitalism. Even if there
is a major development, there were issues related to the concept of capitalism.
The prime one is the implementation of these frameworks on the CEE countries.
In Central and Eastern Europe, there are different countries and for these
countries market technologies used is different. SO the implementation of this
framework over different countries turned into a tedious task. But apart from
this starting trouble, everything went off smoothly and this made better
changes in Poland (Iankova, 2010). Market
economies emerged as a part of this framework and transitional character got
developed in these countries with a coordination of market and non-market
mixes. And because of this, the European Union made business-development
relationship in Central and Eastern Europe.

Diversity of Capitalism Framework
(DoC)

 

Capitalism in Poland and
Ukraine got developed on the basis of Amable’s theoretical model. A deeper
analysis of post-communist social formation is regarded in this theory and thus
it made evaluation over Eastern Europe capitalism in a better way. Different
major factors were concerned while developing the analysis on Polish and
Ukrainian political economies. Five major factors were chosen to study the
effect of this framework. These five factors are the labour market, the social
protection sector, product market competition, the education system and the
financial system.

Considering Product-market
competition, Poland is better regulated than that of Ukraine and this is due to
the state involvement in the market economies. And when the labour market is
regarded Poland has a mild employment protection as there are decentralised
labour markets whereas Ukraine is having moderate employment protection (Mykhnenko, 2005). Financial
sector is underdeveloped considering both Poland and Ukraine. Concerning social
protection, Poland is having high level protection whereas Ukraine is having
low level protection considering health care and social services. And the last,
considering education, Poland is having weak education system whereas Ukraine
is having better public education system.

Balcerowicz Plan

 

In economic crisis, the Communist Economics were not able to provide
fundamental changes and this became a trouble. Poland’s transition after its
political liberalization to a stable income nation was all because of the major
advancement in the capitalism.  For this
success one of the contributing factors is the Shock therapy also known as
Balcerowicz Plan which is emerged from the Soviet Domination. This created
right set of policies for Poland at the right time. This policy contains
macroeconomic and social changes. Economic liberalization was the defined goal
according to the Balcerowicz plan. With the development of this plan, along
with the economic liberalization, it succeeded in preventing hyperinflation.
This plan also included recommendations for private state owned industries
through the sales. With the evolution of this plan, Poland made better evolution
in market economies. Unemployment got reduced and rapid growth in economy
encountered.

 

Conclusion

 

Poland succeeded over its political liberalization
with the help of capitalism and this created better growth rate in the
post-Communist European nation (Marvin, 2010). With the
standard frameworks considering varieties of capitalism and Diversity in
capitalism, the nations under Central and Eastern Europe got highly developed
and this covers Poland too. The newly emerged capitalism in Poland contains
social and economic factors to be considered (Mykhnenko, 2005). This cannot
be considered as a part of East European version or the post-communist version.
The transformation is the major function and this made markets to emerge with
the help of modern capitalism.

 

 

 

 

 

 

 

 

 

 

 

 

 

References
 
Aleksandrowicz, D., Sonntag, S.,
& Wielgohs, J. (2009). The Polish Solidarity Movement in Retrospect: A
Story of Failure Or Success? Berlin: GFSP.
Iankova, E. A. (2010). Central and Eastern
European capitalism: a critical perspective on the varieties of capitalism
approach for its analysis. Employment and economy in Central and Eastern
Europe, 1-6.
Marvin, T. (2010). SHOCK THERAPY: WHAT WE
CAN LEARN FROM POLAND. Prospect- Journal of International affairs at UCSD,
3-8.
Mykhnenko, V. (2005). What Type of
Capitalism in Post-Communist Europe ? Poland and Ukraine Compared . Actes
du GERPISA n°39, 83-112.
Ost, D. (2000). Illusory Corporatism in
Eastern Europe: Neoliberal Tripartism and Postcommunist Class Identities. Politics
and Society, 503–530.
Próchniak, M., Rapacki, R., Gardawski, J.,
Czerniak, A., Horbaczewska, B., Karbowski, A., . . . Towalski, R. (2016). The
Emerging Models of Capitalism in CEE11 Countries – a Tentative Comparison with
Western Europe. Warsaw Forum of Economic Sociology, 7-70.
Rapacki, R. (2016). Diversity of
post-communist capitalism in Central and Eastern Europe – theoretical
perspective. Poland: Warsaw School of Economics.