A LOOK AT C. M. HANN'S
After the fall of Communism in Eastern Europe in 1989, there was a wide range of opinions on what type of economic system would best replace it. One suggestion was the idea some called the "Third Way", which would combine elements of socialism and capitalism in order to create a new system which, according to its advocates, would be superior to both. Historically, however, such types of plans have not been very successful, and have often been less successful than either capitalism or socialism. One such example might be the situation of the "peasant" farmers of Poland during the socialist era, a topic which is discussed in C.M. Hann's 1982 case study of the village of Wislok, "A Village Without Solidarity."
While it would be a stretch to say that the Polish government in the 1970's actually wanted to incorporate capitalism into its economy, peasant farmers did have a unique position for a Communist society. Hann uses the term "peasant farmer" to refer to those Polish farmers who were not working as part of a collective or a State Farm. Instead, they had a specific area of land which they were allowed to farm. Out of their production, they were required to pay a certain amount in taxes to the government, as well make certain "compulsory deliveries" of their produce to the government. This was similar to the situation most producers in Poland faced, where there were certain production goals which they were expected to meet and give to the state. However, the peasant farmers were allowed to keep any goods left over after taxes and their required payment of crops to the government. The remaining production could then be sold at a state market or kept for themselves. It could not, however, be sold on the open market.
During the socialist era these farmers ended up contributing a large portion of Poland's agricultural output, even though they had only 3% of the acreage of the State Farms. So it would seem that the country had found a successful system for this sector, where many could become private farmers and grow crops for profit while at the same time being able to enjoy the generous public benefits, such as free education and free health care, provided by the socialist government. However, the author argues that under closer examination, the economy was set up in such a way that life was unnecessarily difficult for these farmers, and that such a combined approach did not seem to work well at all.
One of the most critical problems was the problem of pricing. While the fact that much of their production did not automatically go to the state did provide some incentive for these farmers to increase their production, the prohibition from selling on the open market meant that farmers were often forced to sell goods at prices which were lower than the market would have sustained. This led to a situation where, said Hann, "although most farmers were theoretically capable of expanding their commodity production...few saw any point in doing so." Families would therefore often grow just enough to satisfy their debts to the government and feed themselves. Many took jobs in the socialist sector to supplement their income, and simply worked as a farmer part time.
The other problem faced by farmers was that although they were able to accumulate some money through farming, they were often not able to use this capital to improve their farm. Products such as modern machinery and even such necessities as fertilizer and antibiotics for animals had to be ordered through the state, a very time-consuming process which was wide open to corruption by state officials. In Wislok, the procedure was to go to the Peasants' Self-Help Cooperative, where farmers could add their name to an order list which would then be passed on to suppliers. Hann cites anecdotal evidence suggesting that corruption was rampant here. Officials apparently would often tell farmers that certain items were unavailable, and then change their mind once offered a bottle of vodka. Since these officials were the only means that farmers had of obtaining many necessary items, farmers were often willing to go along with this and provide gifts in return for favors.
Also troublesome for many farmers were signs that the government was apparently deliberately trying to hold back the peasant sector. Shortly after World War II, the Soviet government tried to force the Polish government to eliminate private farming. Wladyslaw Gomulka, Poland's leader at the time, was sent to jail for opposing this plan for colectivization of the farms. Since that time, the government has made it very difficult for farmers to buy modern equipment and instead forced them to rely on what it called an Agricultural Circle, in which a local organization buys up farm machinery and then loans it out as needed to local farmers. Once again, however, the government gave mostly older, outdated equipment to these organizations while saving the better equipment for the State Farms.
All of this seems to suggest that while the government saw peasant farmers as necessary, steps were also being taken to keep their numbers from growing any larger- for example, laws were passed to allow only one child of a farmer to inherit a farm, and preventing farms from being divided between children. Hann argues that the state also might have liked the fact that peasants were frequently forced to take jobs in the socialist sector in order to earn enough to live, since it meant that the peasants would become more a part of the socialist economy.
Nevertheless, there were also times when the government actively encouraged this sector to grow. In the mid-1970's a program was started where farmers could apply to become "specialists", which allowed particularly successful farmers to obtain credits from the government to further build up their farm. Farmers were often chosen based as much on political loyalty as on their skill in farming, so many who did receive the loans were not necessarily the most qualified. The biggest problem, though, was that very few farmers actually saw a need to expand, since they would still have to sell their goods at state prices. This meant that even after all of the work in expanding, they would not be much better off than they were before.
In the end, the experience in Wislow during the Communist period seems to have shown that its method of combining capitalism and socialism did not work very well. It created a sector which could be only slightly more successful than the socialist sector, and which could at times even cause some problems for the socialist part of the economy, since the government lost a certain amount of control over production. During the early 1980's, for example, a food shortage occurred in Poland, resulting in many private farmers refusing to sell their goods to the government because of personal needs. It seems clear, then, that the economy would function better by being only socialist or only capitalist. Even the limited form of capitalism in Poland outperformed the socialist sector, however, which may help explain why the Communist government allowed it to survive for so long and why the country ended up overwhelmingly choosing a capitalist future.
Hann, C. M., "A Village without Solidarity: Polish peasants in years of crisis", (New Haven (CT), Yale University Press, 1985)
Majkowski, Wladyslaw, "People's Poland: Patterns of Social Inequality and Conflict," (Westport (CT), Greenwood Press, 1985)
Manteuffel-Szoege, Ryszard, "Agriculture in Modern Poland", from the volume "The Polish Dilemma: Views from Within," edited by Lawrence Graham et al., (Boulder (CO), Westview Press, 1987), pp. 95-115.