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Poland Retrenchment and Adjustment in the 1960s
By the early 1960s, economic directives again came only
from
the center, and heavy industry once more received
disproportionate investment. At that point, the government
began
a new industrialization drive, which was again far too
ambitious.
Rates of investment were excessive, the number of
unfinished
industrial projects increased, and the time required for
project
completion was considerably extended. Structural
distortions
increased, and the rates of growth in high-priority
sectors were
adversely affected by the slower than expected growth in
lowpriority sectors. Bottlenecks and shortages increased
inefficiency. By the late 1960s, the economy was clearly
stagnant, consumer goods were extremely scarce, and
planners
sought new approaches to avoid
repetition of the social upheavals of 1956. At this point,
suppression of consumption to its previous levels had
become
politically dangerous, making a high rate of accumulation
problematic at a time when demand for investment funds was
growing rapidly. Because of these factors, additional
investment
funds were allocated to the neglected infrastructure and
to the
production of consumer goods.
Modernization efforts stressed technological
restructuring
rather than fundamental systemic reforms. However, a
policy of
"selective development," introduced in 1968, required
another
acceleration of investments at the expense of consumption.
Selective development and a new system of selectively
applied
financial incentives ended in the worker riots of December
1970
and a second forced change in the communist leadership in
Poland.
Meanwhile, no funds were invested in remedying the
environmental
crisis already being caused by excessive reliance on
"dirty"
lignite in the drive for heavy industrialization.
These conditions necessitated a switch from an
"extensive"
growth pattern (unlimited inputs) to an "intensive"
pattern of
growth that would ensure high rates of growth through
improvements in productivity rather than in the amount of
inputs.
The new emphasis helped drive another reorganization of
industry
in the early 1970s. State enterprises were combined into a
number
of huge conglomerates called Big Economic Organizations.
They
were expected to increase efficiency by economies of
scale. Wage
increases were tied to net increases in the value of
outputs as
an incentive to labor productivity. In practice, however,
central
planners could now control a smaller number of industrial
units
and regulate their activities more intensely. The system
was
never implemented fully, and no improvement in efficiency
resulted. The failure of the 1973 reform demonstrated that
the
technological level of industrial products was still too
low to
permit significant increases in efficiency.
Data as of October 1992
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