APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070023-3
levels of living continued to be low by Western standards, while the rate of improvement lagged even in comparison to other Eastern European countries. In this context, it was the Gomulka regime's failure to meet the rising expectations of the population, rather than some arbitrary standard of adequacy, that provided the fuel for the revolt.
The immediate postwar economic development of Poland, like that of other Eastern European countries, was characterized by successive spurts of inflation aggravated by government deficit spending. Large cash balances were accumulated by the peasantry and by middlemen profiting from the dire economic conditions of the immediate postwar years; the urban wage earners were the hardest hit. Following a series of currency reforms which virtually wiped out the cash savings of the population, the regime promulgated a wage and price reform in 1953 designed to redress imbalances in purchasing power and reduce profiteering. Rationing and dual price system were abolished; the prices of formerly rationed goods were raised and free market prices somewhat reduced. The simultaneous rise in money wages was small, however, and real wages dropped to their lowest level since 1949.
After 1956 a relative improvement in the material welfare of the average worker was brought about partly by wage increases and the liberalization of economic policies by the Gomulka regime but mainly by government acceptance of the spontaneous breakup of agricultural collectives, a development which resulted in a marked rise in farm output. Another factor was a proportional increase in production of consumer goods consumption as opposed to investment goods.
The disproportionate role of agricultural production in determining Polish material welfare has been consistently evident from the influence of poor harvests on general economic conditions, especially in the late 1960's. This led directly to the serious shortages in major food items, mainly meat, that helped impel the regime to raise prices in December 1970 and thus spark the workers' riots. Despite heavy government investments in state agriculture and efforts to increase peasant incentives, agricultural production fluctuated sharply. Weather was also a factor, but the uneven performance in agricultural was also the result of the individualism of the peasantry, together with its resistance to modern farming techniques, and a lack of tangible incentives under the former regime's collection and marketing policies. The Gierek regime has addressed these controllable variables in farm output by a series of new measures designed to gain the confidence of the peasantry. These measures, especially the abolishment of compulsory deliveries and guaranteed land ownership has already stimulated farm output.
Other factors endemic to the Communist regime which have for long affected the material welfare of the consumer include chronic problems in the distribution of products, widespread corruption within the economic bureaucracy, and the low labor productivity of the Polish worker, which is exacerbated by a rapidly growing labor force. As in the case of the peasantry, the Gierek regime's fundamental commitment in this sphere is to eliminate the ills of the past, introduce institutional measures to prevent their repetition, and focus on the interrelationship of consumer welfare and the general economic development of the country. (The specific steps undertaken by the Gierek regime to establish labor confidence and stimulate its welfare are discussed more fully above, under Societal Aspects of Labor.)
Industrialization together with Communist economic and social policies have markedly altered the prewar pattern of material welfare among different groups of the population. Generally, the most adversely affected were the former urban professional, merchant, and artisan classes, and, to the ultimate misfortune of the Gomulka regime, the skilled workers. Although developing economic factors often allowed selected individuals from these groups, especially professionals and some private "entrepreneurs," to be relatively well off, most such individuals must work harder, and more members of the family must be employed, to obtain their proportionate share of consumer goods. Peasants who have productive medium-size farms are better off than they were in the interwar period, consuming more food and consumer goods than ever before. The Gierek regime's farm incentive program is in part designed further to increase the consumption of durable consumer goods by the peasantry and thus reduce the existing gap between rural and urban living standards.
A more marked, but still relative, improvement took place in the level of living of the new members of the industrial labor force, recruited from the ranks of the poorer peasantry. Although their consumption of both food and manufactured products increased, these increases were still below their expectations. The principal beneficiaries of a higher level of living were the members of the "new class," i.e., the government and party bureaucracy. To what extent the more egalitarian policies of the Gierek regime will reduce these disparities over the long term remains to be seen, but its promise to do so and some concrete moves in
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APPROVED FOR RELEASE: 2009/06/16: CIA-RDP01-00707R000200070023-3
