Stuart Shields

Stuart Shields Politics, School of Social Sciences University of Manchester Manchester M13 9PL UK tel: 0161 275 7824 email: [email protected] The historical emergence of neoliberal social forces in Poland’s postcommunist transition - A Gramscian critical economy perspective Paper prepared for workshop ‘What Kinds of Capitalism after Transition?’, 29th February – 1st March 2008 University of the West of Scotland Definitely work in progress – usual caveats apply!

Twenty years on from the collapse of Soviet dominance in Central and Eastern Europe (CEE) and the flourishing cottage industry of ‘transitological’ studies attempting to explain the transitions in CEE and the former Soviet Union (FSU) have reached a peculiar confluence concerning the relative importance of internal and external causes (Fish, 1999: 4; Bunce, 1999; Dimitrova and Pridham, 2004). Beyond the influence of the International Monetary Fund and World Bank (Linden, 2002; Pollert, 1999; Stone, 2002) and of course recent studies on democratization and conditionality during negotiations to join the European Union (EU) (Rupnik and Zielonka, 2003; Grabbe, 2001; Henderson, 1999; Schimmelfennig and Sedelmeier, 2005) in the aftermath of 1989 there has been an almost uniform acceptance that the genuine causes of the path of transition were internal and international factors were, at most, only supportive such as Rodrik’s (1993) claims concerning external trade shocks due to the collapse of the Council for Mutual Economic Assistance (CMEA). Accordingly, Milada Vachudova can claim that ‘from 1989 to 1994 … the EU and other international actors had a negligible impact on the course of political change in ECE states’ (Vachudova, 2005: 4). Nicholas Stern, former chief economist at the European Bank for Reconstruction and Development (EBRD), had a much clearer appreciation for international factors, in particular the international financial institutions (IFIs) who, he reckoned, had ‘a major role to play in fostering market-oriented development’ (Stern, 1998: 9). Indeed Hilary Appel’s assertion that it ‘makes good sense’ to begin a discussion of international factors ‘if one accepts the premise that leaders in various … postSoviet states did not develop their ideas and beliefs … entirely independently’, (2004: 22) would appear to be sound advice. Instead most analyses informed by an Area Studies perspective have focused on how best to achieve the practical transformation of the construction of functioning democracies and moribund planned economic institutions (Ganev, 2005; Cirtautas, 1995). Perhaps not unsurprisingly given the recent hegemony of neoliberalism; the orthodox paradigms of “transitological” studies of CEE have four essential components: the depoliticization of ownership, the depoliticization of allocative mechanisms, the marketization of the economy and the imposition of hard budget constraints. This “off the peg” application of the Washington Consensus, as previously applied in the Third World and Latin America: liberalization, stabilization, privatization and internationalization (Gowan, 1995; Sachs, 1993b), constituted a stylized form of transition treating it as an axiomatically linear process and offering a pragmatic, one-dimensional “toolkit” to solve the problems of CEE which has at best, provided a set of misguided signposts for transition states to follow and, at worse, contributed to the sobering wholesale immiserization of large proportions of the population of CEE (Milanovic, 1998).1 However, despite the mistakes made, this orthodox continues to hold sway in the most crucial areas like the international financial institutions (IFIs), the EU and the finance ministries of the region. In short, what we have witnessed in CEE is not merely the transformation from homo Sovieticus to homo economicus but the further constitution of homo neoliberal, or put more bluntly, the emergence of neoliberal Leninists (Stiglitz, 2000; Ellerman, 2001).2 In what follows, the article explores how this social transformation, the emergence of neoliberalism, arose in the global political economy and then deploys an understanding of this in order to offer a more nuanced grasp of the historical emergence of “transition”, primarily in Poland, but to some degree throughout CEE as Poland’s Shock Therapy approach to transition has been the paradigmatic exemplar and as such has had significant 2

ramifications throughout the region. In the first part of the article I seek to develop a theoretical/methodological perspective which is explicitly critical of traditional perspectives on transition and IR/IPE that tend to buy into an inside-out/outside-in dichotomy. This involves the article establishing the key features of the global structural transformation that has occurred since the 1970s and then identifying the agents of said transformation in the context of the Polish transition to a market economy. Although mainstream perspectives pay lip-service to considering transition as a complex, multi-faceted and global process they rarely overcome the dualism of global/national and continue to isolate parts from the totality. To achieve this, the article is divided into three main sections and the argument unfolds in the following manner. First, I propose a transnational historical materialist account of the processes associated with globalization. This facilitates a discussion of “transition” that emphasizes the transnational social forces engendered by the neoliberal accumulation strategy of the emergent new order in post-communist development. Second, the article launches an interrogation of the transnational context for transition and links this to the emergence of a transnational capitalist class by identifying the social relations of production which in a particular combination have provided the foundations of the social process. The final substantive section then considers a series of events across the time-span of transition where transnationally oriented agents have been implicated in significant interventions into the transition process in Poland. This section offers an account of the historical conditions of the rise and mentality of these “candidate ruling classes” and the particular conditions under which they come to reproduce the social relations of production under their control. POST-COMMUNIST TRANSITION AND GLOBALIZATION: A NEOGRAMSCIAN PERPECTIVE On the whole then, such “transitological” studies of CEE and FSU have tended to acknowledge the significance of the global context in which capitalism was reconfigured in the region only incidentally (Kołodko, 2001). It is only relatively recently that the transitions literature has begun to focus on globalization-related matters; Rupnik for instance contends that ‘in no other region of the world has the impact of international factors … been as apparent as in Central and Eastern Europe’ (Rupnik, 2000: 115). When global, or more accurately international, factors have been acknowledged, this has mainly focused on international economic pressures (Kubicek, 2004), and the general effect on the democratization process.(Rupnik, 2000) Studies of post-communism have on the whole explained the events occurring as domestically motivated through the collapse of Soviet domination as recent work on external influences on democratization has established that the impact of international actors in the transition process varied significantly for individual countries in the region (Vachudova, 2005; Dimitrova and Pridham, 2004). Others contend that globalization has unleashed primordial cultural identities and conflicts as CEE (re)turns to the past to cultivate exclusive ethnic identities and discriminatory myths of cultural origin or value, as a defence mechanism against perceived cultural penetration of western values into autarchic societies (Schierup, 1998; Genov, 2000). Roderick Martin neatly sums up the limited “transitological” standpoint on matters international and global when he asserts the minimal impact of global factors on CEE, ‘globalization theories have only limited relevance for understanding current development in 3

[CEE]’, because relations between the incoming multinationals and national governments in CEE have ‘often been problematic’ due to Western capital’s tentative approach to the region, and preference for low commitment strategies– although the tentativeness varies between countries’ (Martin, 1998: 8). In contrast, Kubicek (2004) distinguishes a capacity for complicity between post-communist states and foreign capital. As Kubicek and similarly Rupnik outline, there is a systematic link between the degree to which CEE states are exposed to the international or global sphere and how external factors have helped to configure transition (Kubicek, 2004; Rupnik, 2000). In contrast though, Martin claims “internal” aspects account for shaping transition (Martin, 1998). There has been sizeable debate as to the extent to which international factors have affected post-communist CEE. However what these assessments document is principally institutional change and policy adjustment in CEE. This leads them down the blind alley that is contemporary “transitology’s” inability to go beyond the form of change in CEE to uncover the social content connected to a specific political order (Jessop, 2002). The question of the relationship between transition and globalization is of deeper theoretical significance. It has palpable implications for the theory and praxis of transition in CEE. Those scholars who see an incompatibility between transition and globalization define transition in substantive terms, emphasizing the implications of the social and economic content of transition policies for class relations in society. In contrast, those authors who see transition and globalization as compatible draw links between policy and substantive aspects in a far less agitated manner. The result of this has been mainstream Western social scientists offering a series of blueprints that have instructed CEE states in the technique of “transition” from the Soviet model of central planning and the one-party-state, to liberal-democratic capitalism (Sachs, 1993b; Burawoy, 1996: 1106). These blueprints centre on the construction of a market economy based primarily on private ownership, the rolling-back of the state as collective owner and provider, and in the political sphere free elections, democratic constitutions and the rule of law. While at a more concrete level the transition program entailed the liberalization of foreign trade and capital movements, and potentially accession to a range of “Western” intergovernmental bodies, these were treated as natural components of a programme of national economic, political and social change. The basic expectation was that the newly-freed citizens of the CEE states would take the advice of their mentors, and elaborate national policies which would allow them successfully to rejoin the European mainstream. What remains absent from such characterizations of CEE is that since the 1970s the key change in the global political economy has been the successful mobilization of neoliberal social forces. The attainment of a degree of hegemony across a number of institutions, broadly understood but including agencies of elite fora, social movements, political parties and governments, has been augmented by changing structures of capital, states and international relations. The most suggestive treatments of neoliberalization have begun to explore this amorphous political-economic phenomenon from a range of analytical, historical and empirical starting points (Peck, 2004; Fourcade-Gourinchas and Babb, 2002; Blyth, 2002). The neoliberal revolution that has since spanned the globe was not simply an unfortunate outcome of global restructuring but an integral moment of it. There are four points to highlight. First, that the emergence of neoliberalism is embedded in the restructuring of capital on a world scale following the economic crisis of 4

the 1970s. Second, neoliberalism needs to be understood as a set of processes that operate transnationally rather than as a set of discrete national events. However I stress here not just the “international” or “global”; rather neoliberalism works as a multiscalar economic discourse, establishing market deference as a necessary (pre)condition, re-naturalizing and thereby insulating economic relations from politics. Since the 1970s certain aspects of discursive sequestration have come to be most effectively achieved at the “global” level. Thus a fundamental shortcoming of the “transitological” literature to date lies in its incomplete analysis of the state and particularly state restructuring under globalization as the account revolves primarily around the imperatives generated by economic restructuring. This focus means a stunted assessment of overtly political logics and imperatives that affect the state. Put candidly, all CEE apparently needs is to be incorporated into the international trading system and multinational world production system (Ellingstad, 1997; Martin, 1998; Zloch-Christy, 1998). Third, the dominant mode of organization in the neoliberal era is predominantly defined by the transnationalisation of money capital and productive capital, though this does not imply that economic imperatives are all-pervasive and state restructuring occurs merely as a response to the restructuring global economy.3 Fourth then, the outcomes of neoliberalization at the national level are a complex series of negotiations reconciling neoliberalism-in-general with institutional hybridity, path specificity and uneven development in, but not exclusive to, the national social formation. All neoliberal transitions are thus distinctive, but each example negotiates its own re-authoring of the relationship between the national and the international: in the Polish case the transition from so-called “actually existing” socialism to so-called “actually existing” neoliberalism. Or as Jamie Peck vividly remarks, ‘no transition to neoliberalism was ever solely an “inside job”, nor was it just an “external imposition”’ (2004: 394). In IR/IPE a number of scholars inspired by the work of the Italian Marxist Antonio Gramsci have begun to provide a suitable lexicon to productively frame questions concerning neoliberalism and the transnationalization of capital (Cox, 1981; Cox, 1983; Bieler and Morton, 2001; Morton, 2003; Gill, 1998; Gill, 1995). For those interested in the external and global facets of transition, Gramscian IPE, despite some penetrating criticisms, (Germain and Kenny, 1998) has provided a ‘number of innovative concepts that promise to illuminate the mechanisms of hegemony at the international level’ (Germain and Kenny, 1998: 3). The paper is therefore an attempt to examine the complexity of historical development in which the political conditions of economic change, social structures and relations of force within a particular national state are clearly at the forefront. The article articulates one of the central concepts of a Gramscian inflected IR/IPE – the emergence of a transnational capitalist class – and its application to the historical case of transition Poland. Using this position as a starting point, I argue throughout the paper that changes in the global political economy constitute the beginnings of the transnationalisation of the state; the shift both upwards in scale (to the regional and global) but also downwards in scale (to the local and urban) from the post-war scalar predominance of the national-state form. Beginning to address the issue of scale, presumes the starting point of conceptual categories such as uneven development, accumulation crisis, and the rise of a powerful and simultaneously vulnerable financial circuits within the world economy that need securing, and utilizing this position enables us to pose the problem as the underlying dynamic of capital expansion and contraction. Questions concerning neoliberalism are thus vital to the logic of so-called globalization witnessed in the switching of scales in the application of 5

transition from the national, to the urban, regional and supra-national. Thus then the transnational is not reducible to its component parts, but arises from the multiple dialectical relations of the production process. Consequently, the separate parts are implicated in the constitution of the ‘thing’, never outside the process of its making. Instead of a nation-state driven process, these changes constitute an important break with the immediate past and signal in a crude interpretation the subordination of the interests of national social forces to the requirements of globally mobile capital (van Apeldoorn, 2000; Bieler, 2005; Morton, 2000). It is this subordination that has configured neoliberal forms of state based on the now well known blueprint of sound money and open markets. The ideas associated with this are transmitted through a range of formal and informal national, international, regional and transnational agencies. This historically novel form of predominantly economic constitutionalism is more than just a set of substantive rules. Alternatively, this transnational regulatory governance establishes social and economic procedural requirements in the form of systems of benchmarking, monitoring and auditing that now impinge throughout the global political economy (Jayasuriya, 2005). What is particularly distinct are the multiple transnational, multi-scalar jurisdictions contouring regulation in diverse areas such as economic governance, the environment and social policy. Transnational regulatory governance is consolidating the shift towards a new regulatory state or more broadly towards what has been termed, ‘regulatory capitalism’, (Levi-Faur, 2005; Weber, 2002). The challenge that this poses to scholars of transition in CEE is to unravel the political and institutional ways that capital has been (re)structured and consent (re)organized from the communist era. In relation to Poland more directly this encourages us to explore the historical embeddedness of the ongoing practical transformations as well as a normative appraisal of the dangers and opportunities that these changes represent for emancipatory alternatives to develop. Hence this approach offers significant methodological and substantive reorientation for “transitological” studies (Cirtautas, 1995; Gans-Morse, 2004; Papava, 2005; Saxonberg and Linde, 2003). In what follows, I explore these concerns in relation to the Polish transition and focus on three main questions. First, how might we begin to think through the implications of a transnational context for transition? Second, what has generated, sustained, and legitimated neoliberal hegemony in Poland? And third, where are the elements of this process visible? Thus it is essential to start to identify the agents of transnationally oriented capital: those individuals and groups that benefit from constructing and then maintaining a particular formulation of what counts as common-sense (Augelli and Murphy, 1988: 13-29; 35-41; Murphy and Tooze, 1991). One step in this process to reveal how certain ideas about legitimate roads to transition have become accepted as common-sense so as to be so naturalized that they are considered unquestionable, objective “facts” of transition. In Poland, neoliberal policies of Shock Therapy and transitological theoretical approaches have been presented as an unproblematic formulation of both institutions and class relationships (Sachs, 1993b; Lipton and Sachs, 1990; Sachs, 1990). However, MacLean maintains that the implications of this approach in relation to CEE and FSU were that transition rapidly became formulated as a set of technical problems, and even though opinion might differ on the minor details:

6

A dominant view was quickly established. What variance and dispute there is has become located much more with views and speculation about the likely consequences of, and possible future developments out of these events, than with evaluation about what the events signify. (1996: 184). Thinking of transition in this way therefore casts transition as concerned with the construction of a dominant form of consciousness in CEE concerning underdevelopment as managed by western political and economic power, and disseminated by state agencies and IFIs. Thus universalisation of a partial knowledge is a crucial factor in the construction of class hegemony to formulate an integral mode of accumulation, an international division of labour, and a legitimate political order. Additionally it is ideology conditioning historical consciousness to allow accumulation, and social order to occur in a specific historical form. As Augelli and Murphy continue, ‘ideologies are always instruments of power, because it is only with a merging of thought and action that the historical role of humanity… can be regained’ (1988: 21). The paper now turns to the integral form of accumulation. TRANSITION AND STRUCTURAL CHANGE IN THE GLOBAL POLITICAL ECONOMY This section of the paper briefly conceptualizes the different dimensions of structural change experienced in the global political economy since the decline of Keynesianism and the crisis of Fordism in the late 1960s early 1970s. This set of changes has three principal components: first an ideological dimension, with the rise to hegemony of neoliberal ideas and philosophy expressing the interests of a particular class fraction of transnational capital; second, a material dimension, with the transformation in the bases of finance and production capital changing from an overarching national state scale to global orientation; and third, an institutional dimension, which has altered forms of state and world order through emerging transnational structures of governance and policy making that have in effect “managed” change since the 1970s (Jayasuriya, 2005). The problem, as Panitch has identified lies is the danger of ‘misrepresenting as cooperative understandings what were in reality structural manifestations of a hierarchically organized international political economy’ (2000: 13). How are these more abstract changes associated with prevailing ideas in postcommunist transition? I outline here three responses to this question. The first point to reflect on is that certain fractions of transnational capital have emerged as a coherent class formation: The elite within this class fraction can be said to be at the zenith of an emerging transnational historical bloc, whose material interests and key ideas (within a broader political consciousness) are bound up with the progressive transnationalization and liberalization of the global political economy. Among its key members are top owners and key executives of [multinational corporations]; central and other bankers; many though not all, leading politicians and civil servants in most advanced capitalist countries, and in some developing countries (Gill, 1993: 261). Members of the Polish post-communist elite need to be considered as belonging to a wider transnational establishment, improved transportation and communications technology have doubtless facilitated the growth of such a class fraction. Private and public institutions have improved dialogue and interaction between elite groups advancing a common identity and a shared consciousness promoting a closer identification of interests. Thus, the class becomes, 7

to paraphrase Marx, more a class for itself than merely a collection of disparate social and material forces (van der Pijl, 2004; Robinson and Harris, 2000; Sklair, 1997) The second concern is that the linkages and networks established by this class fraction have come to fruition in association with the transnationalization of the state whereby state policy and institutional arrangements have increasingly been conditioned by the power of globally mobile capital (Robinson and Harris, 2000). The transnational state is ‘attempting to fulfil the functions for world capitalism that in earlier periods were fulfilled by … a dominant capitalist power that has the resources and the structural position which allows it to organize world capitalism as a whole and impose the rules, regulatory environment, etc, that allows the system to function’ (Robinson, 2004: 44). But the crucial point to underline is the ‘continued existence of the national-state system … a central condition for the power of transnational capital because transnational fractions among dominant groups are able to use these core states to mold transnational structures’ (Robinson, 2004: 47). What this begins to account for are the changing trajectories of political economy, and a nation-statecentric focus fails to take into account the changing form of political economy, thus missing out on the transnational context in which national economies function and the social purpose of the wider transformation in the global political economy. Prioritizing the national in this way does not come to terms accurately with the question of how capital has re-authored its behaviour since the 1970s to take advantage of the competitive process at a variety of different scales both above and below the traditional explanation of the embedded national scale. State form is fundamentally co-determined by transnational social forces extending and transcending different territorial “levels”. What I want to suggest here is rather than constituting an extra “level”, as opposed to say the global, the supra-national or the international, instead understand the transnational as a historical spatial and scalar relation that extends across, beyond and transcends different territorial “levels of analysis”. For Anderson, who takes us some way to an adequate understanding of the transnational, it includes ‘state, supra-state and sub-state in a multi-level conception which can also accommodate non-territorial phenomena’ (Anderson, 2002: 16). The transnational is therefore not merely a way of considering long-term cyclical patterns of development. As a more nuanced approach to restructuring I maintain this is a key strategy for the regulation and attempted resolution of the crisis of Fordism. In a more general sense though, we cannot understand a particular scale without analysing its relationships to other scales. The meaning and importance of each scale is unavoidably embedded in its inter-scalar relationships. Scale is therefore a relational concept. At its most prosaic, global restructuring is not just discovered in ostensibly “global” governance of capital but a whole series of complimentary and/or competitive scales where capital in general attempts to valorize. IR/IPE, due to its philosophical and methodological roots in the neo-neo debate and rejection of Marxist perspectives, has worked with an overwhelmingly one-dimensional understanding of global restructuring, with few attempts to move beyond the global as an additional autonomous level of analysis added on to the international, (Overbeek, 2004; van Apeldoorn, 2004) As Overbeek and Van der Pijl note, one of the crucial dimensions of change in the historical process of capitalist development progresses is capital’s paradigmatic scale of 8

operation, referring to the spatial dimensions of the process, in particular the widening scale of operation of productive capital, from local in the early capitalist period to national in the 19th century, to Atlantic in the mid-20th century, and to global in the early 21st century (Overbeek and van der Pijl, 1993). There are different levels of “where” capital can operate most efficiently and the transnational indicates the relationship between scales, not a zerosum game but relational processes that can as easily be in contradiction and competition with one another, as complimentary. It is not just state policies being redefined but regional and urban policies on the market, on labour-capital relations, and the socio-economic framework appropriate for a neoliberal conception of development to be installed in an incremental and cumulative course (van Apeldoorn, 2004; Brenner, 2004). The implication of this for CEE is the ceding of responsibilities to foreign capital. Foreign direct investment (FDI) was almost universally proclaimed as a fundamental component of the reconstruction of post-communist economies. Indeed the virtuous circle provided by FDI is still considered an essential strategy for economic recovery throughout CEE (Fischer, 2000). Supposedly it would provide benefits like employment, access to Western markets, integration into MNC research and development networks and associated technology transfer, management quality control techniques, modernized production techniques and the burgeoning small and medium sized enterprises that were “missing” under state-socialism (see contributions to Zloch-Christy, 1995; Beyer, 2002). However, FDI is also consolidating a general social system in CEE as it reproduces capitalist relations of production and in terms of an examination of the state indicates the penetrative but consensual process that leave sufficient space to understand the active authoring role of states in globalization (Poulantzas, 1975: 6063). Finance and economic ministries have come to prominence in government over this period. State agencies linked to industry, employment and welfare are downgraded as the competitive race for FDI intensifies (Bohle and Greskovits, 2006). Corporatist agencies, at a global level those associated with Keynesianism or the developmental state, have been increasingly marginalized. The political role of organized labour has declined as small-scale “national” manufacturing industry is pressurized by international competition and regional arrangements like the EU’s Lisbon strategy. One recent example of this pertaining to CEE is the High Level Group report on the Lisbon Strategy that asserted: “Competitiveness” is not just some dry economic indicator that is often unintelligible to the man on the street; rather, it provides a diagnosis of the state of economic health of a country or region. In the present circumstances, the clear message must be: if we want to preserve and improve our social model we have to adapt: it is not too late to change. In any event the status quo is not an option (European Communities, 2004: 44).4 Accordingly, the Kok Report argues that a coordinated reform process is required across all EU states in concert and in CEE it should come as little surprise that the key figures of the transition have tended to be finance ministers. As Czech finance minister Vaclav Klaus indicated, a particular neoliberal model of what constitutes a normal economy rapidly came to dominate, (Blejer and Coricelli, 1994: 100). In Poland, Leszek Balcerowicz maintained a similar position. Such agents have a number of links to the obvious institutions of transnational capital like the IMF, World Bank, and the WTO - which have assumed 9

“management” of the global economy. Inside these powerful supranational institutions, the objective needs of capital are replacing parochial national interests. This shift is evident elsewhere in less obvious but nonetheless active transnational private consultative and planning bodies “beyond” the state, like Bilderberg, the Trilateral Commission, and the World Economic Forum (WEF) at Davos, where economics and politics are synthesized in a dialogue between the corporate elite and their managerial cadre class (van der Pijl, 1998; Gill, 1990). As far as less formal structures of influence are concerned, CEE has its own regional mini-WEF, a “Davos of the East”, held on an annual basis since 1991. The Economic Forum in Krynica-Zdroj, Poland, is undoubtedly one of the most important regional venues for formal and informal meetings between state managers and agents of both domestic and transnational capital.5 Aleksander Kwasniewski described the forum as ‘[playing] an increasingly important role in shaping Poland’s relations with its eastern neighbours and partners’; http://www.forumekonomiczne.pl/page.php?p1=1f0b93ea97b5a46a99c15869f8fb6ab8&uid=a7e6c086d989ae1 02a324879dec79145&PHPSESSID=734514b03e8ce3f6b1029041db4dd7ac. Participants include presidents, prime ministers, ministers, chief executive officers of the largest companies and presidents of banks and financial institutions. Tadeusz Browarek, president of Lumena, one of Poland’s leading IT sector firms and embryonic multinational described the forum as, Perhaps, the most important regional event bringing together politicians and entrepreneurs. It is precisely at the Forum that a majority of future economic relations with a supranational character are initiated in the Region. It is difficult to overestimate the importance of being present at the Forum http://www.forumekonomiczne.pl/page.php?p1=1f0b93ea97b5a46a99c15869f8fb6ab8&uid=a7e6c086 d989ae102a324879dec79145&PHPSESSID=734514b03e8ce3f6b1029041db4dd7ac, emphasis added. Much trading of information and the appropriate polices for successful transition have been explicated at Krynica Zdroj. As one Lithuanian participant at the 2000 forum recorded, ‘Certainly, the opportunity to learn from Poland’s experience is very interesting, as Poland is a leader in economic transformation in the region’ (Morkunaite, 2000) The third aspect that needs noting when exploring changes in the global political economy in relation to CEE is that political and economic changes have occurred in a period when the prevailing ideological situation shifted. The corollary of this has been the reformulation of what is and what is not considered contestable in the realm of appropriate policy choice. Indeed the distinctiveness of the contemporary agenda lies in the fact that market reform and social policy are so intimately connected. Opinion has converged since the 1970s over the use of price and monetary stability to reduce inflationary pressures, and on an ever increasing market orientation to reduce the input of the government and the transfer of emphasis to private initiatives. Fundamental in this process is the installation of neoliberal ideas and practices that have reinforced the promotion of flexible exchange markets, control of inflation and public expenditure, reification of the private sector relative to the public sector, and labour market flexibility, all endorsed and enforced by an obliging collection of IFIs.

10

As Barnett and Finnemore clarify, IFIs have assigned normative value to certain modes of behaviour as they participate in the construction of the social world in a particular neoliberal image (Barnett and Finnemore, 2004). Indeed, Lawson goes even further: ‘by carrying out the “duties of office” and “doing their job”, [IFIs] control information and establish a level of expertise that states cannot possess. This specialized knowledge shapes rather than merely implements the policy directives of states’ (Lawson, forthcoming 2006). IFIs aid in fixing meaning, establishing rules, and transmitting norms around the global system. In this way, they act as disciplinary mechanisms of the abstract application of neoliberalism, de-limiting that which is considered possible and constraining struggles for progressive political alternatives (van der Pijl, 1998: 51) It is in the naturalization and normalization of these ideas that the restriction of possibilities for subordinate classes to engage with the global order prevails at an ideological level: hence the familiar neoliberal mantra that there is no alternative represents, in effect, the concrete manifestation of a particular class ideology as an incontestable structure of thought and its extension into the transition on the collapse of communism (MacLean, 1996). In an uneasy dystopian echo of Polanyi, the reconfiguration of societies and the social relations of production has been based, since the 1970s, on a particular formulation that includes the reification of international competitiveness and the celebration of the market as the most, if not the only, efficient mechanism for organizing social life, wealth, and anti-unionism, all translated into a powerful, self-evident, everyday discourse. This is particularly evident in transition Poland after the disintegration of Solidarity in the early 1990s as a result of its own confused and contradictory role in transition: dissident, anticommunist, pro-Western social democracy movement and pro-labour union (Ashwin, 1998; Crowley, 2004). Policies of marketization and privatization have been advanced through private business leaders and expert economists, and mediated through inter-governmental institutions. The “triumph” of neoliberal economics since the 1970s has become so powerfully engrained as common sense that the states of CEE adopted the strategy of neoliberal transition regardless of whether or not such reforms have been appropriate or not. Transition states have been forced to change their foreign and domestic social and economic policies in a particular way to engage with a particular model of international trade and FDI that emphasizes the reconfiguration of the “national” economy to attract foreign capital (Biersteker, 1992: 105). The unfolding neoliberal order has effectively usurped the previous overriding regulation of the relationship between capital and labour at the nation-state level and replaced this with a far more fluid alternative where states are, in Cerny or Cox’s view, acting to accommodate and favour capital. Hence Cerny’s problematic notion of the “competition” state and Cox’s misplaced analogy of a “transmission belt” from the global into the national economic sphere (Cox, 1992; Cerny, 1997). For both, the state is withdrawing from its embedded liberal compromise as arbitrator between capital and citizen unable to pursue growth as a “domestic” problem any more. Instead with the global investment climate promulgating enhanced competitiveness the state is increasingly forced to act as a market player itself, shaping policy to promote returns from market forces in a global setting (Cerny, 1997). The problem here though is that again the dynamic between international relations and unequal development relies on an immanent problematising of how “globalization” modifies the international-state system and the prospects for “national” development. 11

This reification of the nation-state, particularly the nationally bounded correspondence between class process and national borders, prompts disquiet. Can it be that the contradictions of capitalism manifest themselves as contradictions between nationstates representing the interests of competing national capitals? I would assert that competition corresponds even less (if it ever did) to merely the nation-state scale given that capitalism has always been a global system; globally integrated production, the increasing internationalization of services, and the hyper-mobility of capital have transformed a system historically based on competing national capitals into one characterized by increasingly interpenetration of formerly “national” capitals and the transnationalization of capital and of class relations (Robinson, 1998: 12; van der Pijl, 1984) The particular characteristics of the transition state in its formerly state-socialist guise meant that domestic neoliberal social forces developed surreptitiously, in a capillary way, or as van der Pijl terms it ‘molecularly’ in the direction of the prevailing pattern in the west, (van der Pijl, 1995: 112) secured through a multitude of think thanks, public and private meetings, conferences, academic and popular publications, and lobbying ‘in which the bearers of ideas which have few powerful adherents work away until the material forces begin to change in their direction’ (Sklair, 1997: 516). Since then it has come to be sustained and reinforced by a much broader based coalition of social forces (see Fourcade-Gourinchas and Babb, 2002) so that at a certain point a class was constituted through integration into the circuits of global capital and links to networks of transnational elites. In Poland this occurred with an increasing velocity from the 1970s through to the 1990s. While for the half century of communist rule Poland had been formally separated from the mainstream of international economics formal reintegration into the neoliberal mainstream was precipitated by the problems associated with the Gierek debt crisis (author) . Having outlined the material and ideational contours of the transnational context of transition the article now turns to an examination of the representatives of the TCC and their intervention in Poland’s transition to a market economy. THE EMERGENCE OF POLISH SOCIAL FORCES FOR NEOLIBERALISM Poland’s neoliberal revolution was introduced on January 1st 1990 and has been designated the Balcerowicz Plan following the chief architect or Shock Therapy, with the deliberate aim of offering a comprehensive transformation as opposed to the more usual arbitrary, ad hoc, partial measures that had existed before to build capitalism. As Balcerowicz’s accomplice Jeffrey Sachs regaled observers around the time, The economic reforms will set in motion a sustained process of economic restructuring …Once market forces are unleashed, there should be a strong pull of resources into the previously neglected [service] sector. …Agriculture is another area where we should expect major restructuring. … the third major trend that we should expect is a complete restructuring within the industrial sector, from energy-intensive heavy industry to more labor-intensive and skill-intensive industries that can compete on the world market…Western firms…are likely to set up operations…for the sake of export production, in the same way as European firms are investing in Spain (Sachs, 1993a: 209) The Balcerowicz state Plan required a reduction in the role of the state in the economy therefore no longer provide production plans, investment, or subsidies. Markets 12

would instead determine supply, demand, and price. Welfare and social spending was to be cut in areas such as unemployment benefit and consumer subsidies. As many state firms as possible were to be privatized as private firms respond to markets and discipline their workforces more efficiently than state firms. Private firms have the added advantage of disciplining non-privately owned firms to become more efficient and competitive. And of course unemployment would discipline labour by initiating competition. Western capital and products were given favourable conditions for entry into the Polish market through a mixture of low import duties, a weakened currency (the zloty), and low wages. Thus the path forwards was simple, the oft repeated mantra of stabilization, liberalization and privatization. In the remainder of the article the creation and implementation of the plan is explored through the positioning of pre-transition Polish neoliberal social forces. The key transformation came in the alteration from a political critique of communism to a primarily economic reform debate. The economic sphere became the overriding concern as ‘the important problem became not who will rule and who he [sic] will rule, but whether the government will be limited … [allowing] … the economy to function freely’ (Szacki, 1995: 122). The activities of particular social forces engaged in these transformations can be decoded in the rearticulation of anti-communism as the emergence in Poland of van der Pijl’s transnationally oriented Lockean social forces (van der Pijl, 1995). The ideological shifts that occurred in the 1970s and the materialization of a neoliberal discourse served to legitimate the self-constitution of an intellectual and cadre class, the abandonment of labour-related concerns, employee self-management schemes, and other “social democratic” or socialist ideas tainted through their association with the mendacious communist state and earlier incarnations of Solidarity.6 Walicki (1988), for example, criticized Solidarity for being too socialist, too ‘workerist’; and the response of workers to this criticism was ambivalent as they increasingly squabbled amongst themselves (Kramer, 1995). As Gramsci detected in his discussion of Americanism and Fordism, there was a lag between contemporary ideologies of organized labour and the new kind of working class being constructed by Fordism (Gramsci, 1971: 286). In the Polish context, trade unions were correspondingly fighting labour battles of the previous decade while neoliberalism was determining a new type of labour better suited to a post-communist productive regime. The implications of this for Balcerowicz and likeminded reformers would be to reinforce an elitist attitude to the transition, reluctant participation in democratic practices and a singleminded legislative construction of the parameters to a market society after 1989 devoid of consideration for wider social support other than the oft-repeated notion of a “new middle class” who would support reforms. The prominence of the fundamental role of individual freedom through economic activity echoes the social arrangements that Gramsci termed the ‘implacable play of free competition’ that purges the state of ‘its noxious elements through the free clash of bourgeois social forces’ (Gramsci, 1977: 46). It is at this point that we begin to see clearly the emergence of Polish social forces for neoliberalism. For example, in 1978, Balcerowicz had convened an informal group of economists. Throughout the 1980s this group of economists together with other sympathetic economists scattered around Poland, and with the help of émigré economists, began to pursue the idea of transforming the sclerotic Polish economy. Balcerowicz provides useful illustration of this in relation to Poland when discussing the role of a core group of ‘excellent advisors’ in the late 1980s,

13

And there were some other advisors, some of them of Polish origin like Stanislaw Gomulka, who worked at the London School of Economics, and he came to Poland. … Jacek Rostowski, who was of Polish origin who was born in Britain, but he spoke perfect Polish and was a very good economist. So I think that I had who a core group of excellent advisors who helped us on working out some legal strategies in the program (Interview with Leszek Balcerowicz, 2000).7 According to Lane studies of émigrés show a consistent pattern of changing support in the 1980s, the young were much more critical of state socialism; whereas the earlier post-war generation had been more supportive (Lane, 2005; Zubek, 1997: 185). This group not only included Balcerowicz but also others who would later form part of the Shock Therapy team at the Ministry of Finance (Balcerowicz, 1996). A decade later he acknowledged the importance and extent of this network: I think I was lucky in my first choice of my partners, my colleagues. I was sort of a leader of an economic team within the government, and … created a group in the late seventies. And some members of the group worked with me as academics, but very practical-oriented academics, and in the eighties they entered the government. … Marek Dabrowski was one of the members of the original group … and then he entered the government with me as my deputy in the Ministry of Finance, which was crucial. The minister of finance became very powerful in Poland, and rightly so, as a center of stabilization and structural reforms (Interview with Leszek Balcerowicz, 2000). To give some sense of the closeness of this group the following short biographies make interesting consideration. Balcerowicz was educated at the Warsaw Main School of Economics (WMSE) one of the most Western-oriented faculties of economics in the Soviet bloc. Of the first nine post-communist finance ministers five were from WMSE. Among the other members of this group, consider the following illustrations and their connections to neoliberal-oriented social forces. Marek Dabrowski, as noted above a personal friend of Balcerowicz, graduated from the economic faculty of WMSE in 1974. Between 1978 and 1980 he played an active role as part of the Group, which presented the most radical variant of market reform during national political debates in 1980-1. In August 1989 he helped prepare the economic reforms of the first democratic government of Poland. From September 1989 to September 1990 he was first deputy minister of finance. Dabrowski has served on numerous advisory committees to the Prime Minister and the Central Bank of Poland. From October 1994 to May 1995 he worked for the Research Department of the World Bank. In September 1991 Dabrowski was one of the founders, with Balcerowicz, of the Center for Social and Economic Research (CASE), a private research and policy advising institution involved in many projects that support transition throughout. Within the framework of these projects he has spread the neoliberal word working as an economic advisor to governments and central banks in Russia, the Ukraine, Kyrgyzstan, Kazakhstan, Georgia, Mongolia, Uzbekistan, Romania and Bulgaria (Kowalik, 2002). Rafal Krawczyk, a particularly enthusiastic proponent of one-off voucher privatization and vigorously opposed to non-private forms of ownership, started his political career with an attempt to establish a branch of the neoliberal think tank the Heritage 14

Foundation in Warsaw. He was Bradley Resident Scholar at The Heritage Foundation during 1989-90, producing a number of robust neoliberal publications (Krawczyk, 1989b; Krawczyk, 1989a). Grzegorz Kolodko, one of Balcerowicz’s successors as deputy premier and minister of finance from 1994 to 1997 under the ex-communists, is also a professor at WMSE as well as director of Transformation, Integration and Globalization Economic Research (TIGER) at the Leon Kozminski Academy of Entrepreneurship and Management. Between 1998 and 2000 he was a visiting fellow at the World Bank and the IMF, and a visiting professor at Yale, UCLA and the University of Rochester (see http://www.tiger.edu.pl/english/kolodko/cv.htm). The impact of this group should not be understated. Their role during the 1980s in a party sponsored reform debate was crucial in engulfing the whole of Polish society and the emergence of virtual consensus that the economic system was bankrupt and needed the massive, immediate, wholesale dismantling of state socialism and the introduction of a market economy (Kuzinski, 1987; Sadownik and Wawrzyniak, 1985). By 1988, Walicki contended that this group of reforming economists directly involved in the debate had ‘already been successful in changing the intellectual climate of Poland’ (1988: 22). During the political liberalization of the 1970s many young academics obtained various grants to participate in exchanges with Western universities. Subsequently in the 1980s a distinctive intellectual and entrepreneurial group conscientiously and openly championed neoliberalism (Zubek, 1997: 184). From its inception, Polish neoliberalism has therefore been an intrinsically elitist movement, intimately connected to its transnational counterparts. Yet what distinguishes the Gramscian analysis proffered here from conventional elite sociological transformation models (Róna-Tas, 1994; Nee, 1996; Szelenyi and Kostello, 1996) is the constancy of ideological cohesion between the various groups. Members of the Polish elite and intellectual neoliberals realigned the central problem facing society by articulating an argument that moved from the political critique of communism to the overt notion that economic freedom precedes all other liberties. This helped to constitute the claim that systemic transformation necessitated instituting a specific form of market economy. The Polish neoliberals participated in fundamentally reconfiguring anticommunism so that the solution was no longer the collective self-liberation of a society, as per Solidarity, but a new future constructed in the domain of global non-state economic activity.8 Consequently, the solution to Poland’s “problem of communism” is to be found at another (global) scale. By the late 1980s formal discussions between Solidarity and the Communist Party at the Round Table negotiations that followed the initial reform debate appeared on the surface to be addressing matters of deep ideological difference and consequence. However, the reality is that they focused more directly on procedural and systemic matters, because the two sides were already in agreement as to the future direction Poland should take (Aslund, 2002: 56) In the period leading up to the negotiations, the consensus on Poland’s future was so widespread on both sides that the Party negotiators appeared even more committed to a rapid and drastic transformation to a capitalist economy than their Solidarity counterparts (Dziewanowski, 1989). Not only had communism been discredited and declared intellectually bankrupt, but it had been unable to demonstrate the ability to produce innovative reform. Moreover, not even reform elements within the party had proved able to launch their own model of “reform socialism”. In short, the neoliberals had successfully 15

constructed a position whereby the only viable option remaining was to change the entire system by introducing a market-driven economy. It is worth accentuating at this juncture that Polish neoliberals aimed to introduce their reforms without the direct participation of the general population preferring instead a Leninist vanguard approach to top down reconstruction of the social order. For this group of insulated technocratic reformers, the involvement of civil society would only delay the necessary changes (Przeworski, 1991: 187).9 The practical result in Poland was an endless series of acrimonious disagreements, organizational splintering, and the inability to form coalitions in the face of genuine political opponents (Wierzbicki, 1985). As Balcerowicz and others argued, existing social groups were part of the problem (Balcerowicz, 1996; Greskovits, 1998: 139). The fact that this particular group of people dominated the allpowerful Polish finance ministry was central to the success of neoliberal transition. They triumphed, not necessarily because of their policies but because they were well organized in tight, entrenched, secluded bureaucratic teams isolated from society and united by their personal ties and common backgrounds (Greskovits, 1998: ch. 3) I worked with a group …and these were relatively young people in the range of 40s or [younger], so I was not alone. We formed a sort of economic part of the government, and we were usually quicker than the other part in proposing solutions, and then we took over the job of getting the acceptance. Within the Parliament, I have some excellent partners. My former student, for example, became sort of my chief of staff, and he was entrusted with the job of political coordination, how to get the support within the Parliament (Interview with Leszek Balcerowicz, 2000). They had already been working together for years on aspects of the transition to a market economy. In December 1989 The Economist noted: [Balcerowicz] hand-picked his group, mostly younger colleagues from Poland’s economic academies … One Polish cabinet minister … said there were now “two Polish governments; the Balcerowicz team and the rest of us … we just have to accept what they say” (The Economist, 1989) They were ‘articulate, well versed in Western economic theory and fluent in English and German’ (Slay, 1994: 43), and what they brought to the first post-communist government was not only a group of dedicated expert professionals but also a level of credibility in the eyes of Western states and the multilateral financial institutions. The Balcerowicz Group had spent the end of 1989 developing the theoretical effort they had worked on through the 1970s and 1980s into an executable program for reform, which, significantly, ‘[secured] the approval of the IMF and the World Bank’ (Slay, 1994: 91). The IMF and World Bank reciprocated by aiding the Ministry of Finance and in the case of privatization, the Ministry of Ownership Change (Meaney, 1995). The World Bank assisted the privatization ministry during its creation and provided a steady stream of technical assistants (World Bank, 1996: 110) The ministry was exempted from the usual ceiling on civil service pay scales thus enabling it to attract the most capable staff (Amsden et al., 1995: 119). In September 1989, with the formal collapse of communism, the Balcerowicz Group officially gained power as part of the first non-Communist Party government led by Tadeusz Mazowiecki. Thus, there was a specific class fraction connected to the ideological and policy networks of transnational neoliberalism present at the outset of Polish reforms. By the end 16

of the year, domestic representatives of neoliberalism had achieved a virtual monopoly on advice and policy application throughout CEE, not just Poland, due in part to their links to the external social forces of neoliberalism. With almost total dominance of the domestic reform debate, it is not altogether a surprise that transition had a neoliberal essence. These individuals had gained power and influence, materially and ideologically, through their links to the external social forces of transnational capital. The neoliberal technocrats took over the state in the 1990s in an attempt to manage the transition to a completely different economic model by deploying a rejection of the state socialist and clientalist mechanisms of the previous order, with Solidarity included. They succeeded in the sense that they prevented (and continue to prevent) political opposition from blocking further neoliberal transition. CONCLUSIONS This article has had two main aims. Firstly, it has endeavoured to provide an analysis of the political role played by an emergent transnational capitalist class in a longer term analysis of the Polish transition to a market economy. It has achieved this by engaging with recent Gramscian scholarship on the emergence of a transnational capitalist class while continuing Gramsci’s emphasis on the links between changes in capitalism, changes in elite political strategies and changes in forms of everyday social life. Secondly, the article illustrated the efficacy of this approach to historical analysis by elaborating some off the more significant connections and networks formed by neoliberal-oriented transnational social forces in operating to embed and secure neoliberal reforms. This was shown in the transnational (re)configuration of the foundations of the Polish state through the application of the Balcerowicz Plan. It is also important to recognize that the rise of this class fraction committed to neoliberalism in Poland is not so much an imposition from outside (related primarily to the external debt generated during the Gierek regime) but a reflection of an internal evolution in which a fraction of the ‘national’ elite has become integrated into transnational circuits of capital accumulation – as comfortable with their consumption of Big Macs and Mercedes as their foreign counterparts. What is now necessary is further investigation into the possibilities for, and actual operation of some kind of counterhegemony, that is, the welding together of different strands of resistance into a potential coalition of forces capable of engaging in a strategy to gain power. What this also reminds us is that social change, emancipatory or regressive, does not automatically follow economic developments, but is instead produced by historically situated social agents whose actions are enabled and constrained by their social self-understandings (Gramsci, 1971: 326).

17

BIBLIOGRAPHY Amsden, A., Kochanowicz, J. & Taylor, L. (1995) The Market Meets its Match. Restructuring the Economies of Eastern Europe (Harvard University Press). Anderson, J. (2002) 'Questions of Democracy, Territoriality and Globalisation' in Anderson, J. (Ed.) Transnational Democracy: Political spaces and border crossings (Routledge). van Apeldoorn, B. (2000) 'Transnational Class Agency and European Governance: the Case of the European Round Table of Industrialists' New Political Economy vol. 5 no. 2. pp. 157-181. van Apeldoorn, B. (2004) 'Theorizing the transnational: a historical materialist approach' Journal of International Relations & Development vol. 7 no. 2. pp. 142-176. Appel, H. (2004) A New Capitalist Order: Privatization and Ideology in Russia and Eastern Europe (University of Pittsburgh Press). Ashwin, S. (1998) 'Endless patience: explaining Soviet and post-Soviet social stability' Communist and Post-Communist Studies vol. 31 no. 2. pp. 187-198. Aslund, A. (1999) 'Why Has Russia’s Economic Transformation Been So Arduous?'). Aslund, A. (2002) Building Capitalism: The Transformation of the Former Soviet Bloc (Cambridge University Press). Augelli, E. & Murphy, C. (1988) America’s Quest for Supremacy and the Third World (Pinter). Balcerowicz, L. (1996) Socialism, Capitalism, Transformation (Central European University Press). Barnett, M. & Finnemore, M. (2004) Rules For The World: International Organizations In Global Politics (Cornell University Press). Beyer, J. (2002) '“Please invest in our country” how successful were the tax incentives for foreign investment in transition countries?' Communist and Post-Communist Studies vol. 35 no. 2. pp. 191-211. Bieler, A. (2005) 'European Integration and the Transnational Restructuring of Social Relations: The Emergence of Labour as a Regional Actor?' Journal of Common Market Studies vol. 43 no. 3. pp. 461-484. Bieler, A. & Morton, A. D. (2001) Social forces in the making of the new Europe: the restructuring of European social relations in the global political economy (Palgrave). Biersteker, T. J. (1992) 'The "Triumph" of Neoclassical Economics in the Developing World: Policy Convergence and Bases of Governance in the International Economic Order' in Rosenau, J. N. & Czempiel, E.-O. (Eds.) Governance Without Government: Order and Change in World Politics (Cambridge University Press). Blejer, M. I. & Coricelli, F. (1994) The making of economic reform in Eastern Europe: conversations with leading reformers in Poland, Hungary, and the Czech Republic (Elgar). Blyth, M. (2002) Great transformations: economic ideas and institutional change in the twentieth century (Cambridge University Press). Bohle, D. & Greskovits, B. (2006) 'Capitalism without compromise: Strong businesses and weak labor in Eastern Europe's new transnational industries' Studies in Comparative International Development vol. 41 no. 1. pp. 3-25. Bozyk, P. (1992) Kto winien?(Who Is Guilty?) (PEA). Brenner, N. (2004) New state spaces: urban governance and the rescaling of statehood (Oxford University Press). Bunce, V. (1999) 'The Political Economy of Postsocialism' Slavic Review vol. 58 no. 4. pp. 756-793. 18

Burawoy, M. (1996) 'The State and Economic Involution: Russia through a Chinese Lens' World Development vol. 24 no. 6. pp. 1105-17. Cerny, P. G. (1997) 'Paradoxes of the Competition State: The Dynamics of Political Globalization' Government and Opposition vol. 32 no. 2. pp. 472-496. Cirtautas, A. M. (1995) 'The post-Leninist state: A conceptual and empirical examination' Communist and Post-Communist Studies vol. 28 no. 4. pp. 379-392. Cox, R. W. (1981) 'Social Forces, States and World Orders: Beyond International Relations Theory' Millennium: Journal of International Studies vol. 10 no. 2. pp. 126-155. Cox, R. W. (1983) 'Gramsci, Hegemony and International Relations: An Essay in Method' Millennium: Journal of International Studies vol. 12 no. 2. pp. 162-75. Cox, R. W. (1992) 'Global Perestroika' in Miliband, R. & Panitch, L. (Eds.) New World Order? The Socialist Register (The Merlin Press). Crowley, S. (2004) 'Explaining Labor Weakness in Post-Communist Europe: Historical Legacies and Comparative Perspective' East European Politics and Societies vol. 18 no. 3. pp. 394-429. Dahrendorf, R. (1990) Reflections on the revolution in Europe: in a letter intended to have been sent to a gentleman in Warsaw (Chatto & Windus 1990). Dimitrova, A. & Pridham, G. (2004) 'International actors and democracy promotion in central and eastern Europe: the integration model and its limits' Democratization vol. 11 no. 5. pp. 91-112. Dziewanowski, K. (1989) 'Notatki spod stolika i na marginesie (Notes from under the table and in the margins)' Tygodnik Powszechny vol. no. pp. Ellerman, D. (2001) 'Lessons from Eastern Europe’s Voucher Privatization ' Challenge vol. 44 no. 4. pp. 14-37. Ellingstad, M. (1997) 'The Maquiladora Syndrome: Central European Prospects' EuropeAsia Studies vol. 49 no. 1. pp. 7-21. European Communities (2004) 'Facing the Challenges: The Lisbon strategy for growth and employment. Report from the High Level Group chaired by Wim Kok' (Office for Official Publications of the European Communities). Fischer, P. (2000) Foreign Direct Investment in Russia: A Strategy for Industrial Recovery (Macmillan). Fish, M. S. (1999) 'Postcommunist Subversion: Social Science and Democratization in East Europe and Eurasia' Slavic Review vol. 58 no. 4. pp. 794-823. Fourcade-Gourinchas, M. & Babb, S. L. (2002) 'The Rebirth of the Liberal Creed: Paths to Neoliberalism in Four Countries' American Journal of Sociology vol. 108 no. 3. pp. 533-579. Ganev, V. I. (2005) 'Post-communism as an episode of state building: A reversed Tillyan perspective' Communist and Post-Communist Studies vol. 38 no. 4. pp. 425-445. Gans-Morse, J. (2004) 'Searching for transitologists: Contemporary theories of postcommunist transitions and the myth of a dominant paradigm' Post-Soviet Affairs vol. 20 no. 4. pp. 320-349. Genov, N. (2000) 'Global Trends and Eastern European Societal Transformations' International Social Science Journal vol. 52 no. 166. pp. 539-547. Germain, R. & Kenny, M. (1998) 'Engaging Gramsci: International Relations Theory and the New Gramscians' Review of International Studies vol. 24 no. 1. pp. 3-21. Gill, S. (1990) American hegemony and the Trilateral Commission (Cambridge University Press).

19

Gill, S. (1993) 'Neo-liberalism and the shift towards a US-centred transnational hegemony' in Overbeek, H. (Ed.) Restructuring Hegemony in the Global Political Economy: The Rise of Transnational Neo-liberalism in the 1980s (Routledge). Gill, S. (1995) 'Globalisation, Market Civilisation and Disciplinary Neoliberalism' Millennium: Journal of International Studies vol. 24 no. 3. pp. 399-423. Gill, S. (1998) 'New constitutionalism, democratisation and global political economy' Pacifica Review vol. 10 no. 1. pp. 23-38. Gowan, P. (1995) 'Neo-Liberal Theory and Practice for Eastern Europe' New Left Review vol. no. 213. pp. 3-60. Grabbe, H. (2001) 'How does Europeanisation affect Central Eastern European governance? Conditionality, diffusion and diversity' Journal of European Public Policy vol. 8 no. 4. pp. 1013-1031. Gramsci, A. (1971) Selections from the Prison Notebooks (Lawrence and Wishart). Gramsci, A. (1977) Selections from Political Writings 1910-1920 (Lawrence and Wishart). Greskovits, B. (1998) The Political Economy of Protest and Patience: East European and Latin American Transformations Compared (Central European University Press). Henderson, K. (1999) Back to Europe: Central and Eastern Europe and the European Union (UCL Press). Interview with Leszek Balcerowicz (2000) Commanding Heights: The Battle for the World Economy (PBS online http://www.pbs.org/wgbh/commandingheights/shared/minitext/int_leszekbalcero wicz.html#6). Jayasuriya, K. (2005) Reconstituting the Global Liberal Order: Legitimacy and Regulation (Routledge). Jessop, B. (2002) The Future of the Capitalist State (Polity). Kołodko, G. W. (2001) 'Globalization and catching-up: from recession to growth in transition economies' Communist and Post-Communist Studies vol. 34 no. 3. pp. 279-322. Kowalik, T. (2002) 'Economics - Poland' in Kaase, M., Sparschuh, V. & Wenninger, A. (Eds.) Three Social Science Disciplines in Central and Eastern Europe: Handbook on Economics, Political Science and Sociology (1989-2001) (GESIS/Social Science Information Centre). Kramer, M. (1995) 'Polish workers and the post-communist transition, 1989-1993' Communist and Post-Communist Studies vol. 28 no. 1. pp. 71-114. Krawczyk, R. (1989a) 'The Communist Bloc: Transformation in Progress' Heritage Foundation Lecture vol. no. 183. pp. Krawczyk, R. (1989b) 'The Road from Serfdom: Prospects for Freedom in Eastern Europe' Heritage Foundation Lecture vol. no. 192. pp. Kubicek, P. (2004) Organized labor in postcommunist states: from solidarity to infirmity (University of Pittsburgh Press). Kuzinski, S. (1987) Polityka gospodarcza: realia, dylematy, propozycje (Pwe). Lane, D. (2005) 'Revolution, class and globalisation in the transition from state socialism' European Societies vol. 7 no. 1. pp. 131-155. Lawson, G. (forthcoming 2006) 'The Promise of Historical Sociology in International Relations' International Studies Review vol. no. pp. Levi-Faur, D. (2005) 'The global diffusion of regulatory capitalism' Annals of the American Academy of Political and Social Science vol. 598 no. 1. pp. 12-32.

20

Linden, R. H. (Ed.) (2002) Norms and Nannies: The Impact of International Organizations on the Central and East European States, (Rowman & Littlefield). Lipton, D. & Sachs, J. (1990) 'Creating a Market Economy in Eastern Europe: The Case of Poland' Brookings Papers on Economic Activity 1 vol. no. pp. MacLean, J. (1996) 'The Ideology of the End of Marxism/End of Socialism Thesis: A Critical, Global Perspective' in Einhorn, B., Kaldor, M. & Kavan, Z. (Eds.) Citizenship and Democratic Control in Contemporary Europe (Edward Elgar). Martin, R. (1998) 'Central and Eastern Europe and the International Economy: The Limits to Globalisation' Europe-Asia Studies vol. 50 no. 1. pp. 7-26. Meaney, C. S. (1995) 'Foreign experts, capitalists, and competing agendas: privatization in Poland, the Czech Republic, and Hungary' Comparative Political Studies vol. 28 no. 2. pp. 275. Milanovic, B. (1998) Income, inequality, and poverty during the transition from planned to market economy (World Bank). Morkunaite, R. (2000) Warsaw Voice vol. September 9th no. pp. Morton, A. (2003) 'Social Forces in the Struggle over Hegemony: neo-Gramscian Perspectives in International Political Economy' Rethinking Marxism vol. 15 no. 2. pp. 153-179. Morton, A. D. (2000) Mexico in the global political economy: contesting the construction of hegemony (University of Wales Aberystwyth). Murphy, C. & Tooze, R. (1991) The new international political economy (Lynne Rienner 1991). Nee, V. (1996) 'The Emergence of a Market Society: Changing Mechanisms of Stratification in China' American Journal of Sociology vol. 101 no. 4. pp. 908-949. Overbeek, H. (2004) 'Transnational class formation and concepts of control: towards a genealogy of the Amsterdam Project in international political economy' Journal of International Relations & Development vol. 7 no. 2. pp. 113-141. Overbeek, H. & van der Pijl, K. (1993) 'Restructuring Capital and Restructuring Hegemony: Neo-liberalism and the Unmaking of the Post-war Order' in Overbeek, H. (Ed.) Restructuring Hegemony in the Global Political Economy: The Rise of Transnational Neo-liberalism in the 1980s (Routledge). Panitch, L. (2000) 'The New Imperial State' New Left Review II vol. 2 no. pp. 6-18. Papava, V. (2005) 'On the theory of post-Communist economic transition to market' International Journal of Social Economics vol. 32 no. 1-2. pp. 77-97. Peck, J. (2004) 'Geography and public policy: constructions of neoliberalism' Progress in Human Geography vol. 28 no. 3. pp. 392-405. van der Pijl, K. (1984) The Making of an Atlantic Ruling Class (Verso). van der Pijl, K. (1995) 'The Second Glorious Revolution: Globalizing Elites and Historical Change' in Hettne, B. (Ed.) International Political Economy: Understanding Global Disorder (Zed Books). van der Pijl, K. (1998) Transnational Classes and International Relations (Routledge). van der Pijl, K. (2004) 'Two faces of the transnational cadre under neo-liberalism' Journal of International Relations & Development vol. 7 no. 2. pp. 177-207. Pollert, A. (1999) Transformation at work in the new market economies of central eastern Europe (Sage). Poulantzas, N. (1975) Classes in contemporary capitalism (NLB). Przeworski, A. (1991) Democracy and the market: political and economic reforms in Eastern Europe and Latin America (Cambridge University Press). 21

Robinson, W. I. (1998) 'Beyond Nation-State Paradigms: Globalization, Sociology, and the Challenge of Transnational Studies' Sociological Forum vol. 13 no. 4. pp. 561-594. Robinson, W. I. (2004) A theory of global capitalism: production, class and state in a transnational world (Johns Hopkins University Press). Robinson, W. I. & Harris, J. (2000) 'Towards a Global Ruling Class? Globalization and the Transnational Capitalist Class' Science and Society vol. 64 no. 1. pp. 11-54. Rodrik, D. (1993) Making Sense of the Soviet Trade Shock in Eastern Europe: a Framework and Some Estimates (World Bank). Róna-Tas, Á. (1994) 'The First Shall Be Last? Entrepreneurship and Communist Cadres in the Transition from Socialism' American Journal of Sociology vol. 100 no. 1. pp. 4069. Rupnik, J. (2000) 'Eastern Europe: The International Context' Journal of Democracy vol. 11 no. 2. pp. 115-129. Rupnik, J. & Zielonka, J. (Eds.) (2003) The Road to Europe: The Czech and Slovak Republics, (Manchester University Press). Sachs, J. (1990) 'What is to be done?' The Economist vol. 13th January no. pp. Sachs, J. (1993a) 'The Economic Transformation of Eastern Europe: The Case of Poland' in Poznanski, K. (Ed.) Stabilization and Privatization in Poland (Kluwer Academic Publishers). Sachs, J. (1993b) Poland's jump to the market economy (MIT Press). Sadownik, H. & Wawrzyniak, B. (Eds.) (1985) Reforma gospodarcza: doswiadczenia i problemy, (PWE). Saxonberg, S. & Linde, J. (2003) 'Beyond the Transitology-Area Studies debate' Problems Of Post-Communism vol. 50 no. 3. pp. 3-16. Schierup, C.-U. (1998) 'The Spectre of Balkanism: Globalisation, Fragmentation and the Enigma of Reconstruction in Post-Communist Society' in Schierup, C.-U. (Ed.) Scramble for the Balkans Nationalism, Globalism and the Political Economy of Reconstruction (Palgrave). Schimmelfennig, F. & Sedelmeier, U. (2005) The europeanization of Central and Eastern Europe (Cornell University Press). Sklair, L. (1997) 'Social Movements for Global Capitalism: The Transnational Capitalist Class in Action' Review of International Political Economy vol. 4 no. 3. pp. 514-537. Slay, B. (1994) The Polish economy: crisis, reform, and transition (Princeton University Press). Slovak Republic Government Office (2003) 'Summit of Visegrad Four (V4) Prime Ministers'). Stern, N. (1998) 'The future of the economic transition' EBRD Working Paper vol. no. 30. pp. Stiglitz, J. E. (2000) 'Whither Reform? Ten Years of Transition' in Pleskovic, B. & Stiglitz, J. E. (Eds.) Annual World Bank Conference on Economic Development (World Bank). Stone, R. W. (2002) Lending Credibility: The International Monetary Fund and the PostCommunist Transition (Princeton University Press). Szacki, J. (1995) Liberalism after communism (Central European University Press). Szelenyi, I. & Kostello, E. (1996) 'The Market Transition Debate: Toward a Synthesis?' American Journal of Sociology vol. 101 no. 4. pp. 1082-1096. The Economist (1989)).

22

Vachudova, M. A. (2005) Europe Undivided: Democracy, Leverage, and Integration After Communism (Oxford University Press). Walicki, A. (1988) 'Liberalism in Poland' Critical Review vol. 2 no. 1. pp. 8-38. Weber, H. (2002) 'The imposition of a global development architecture: the example of micro credit' Review of International Studies vol. 28 no. 3. pp. 537-555. Wierzbicki, P. (1985) Mysli staroswieckiego Polaka (Thoughts of an old-fashioned Pole) (Aneks). World Bank (1996) World Development Report: From Plan To Market (Oxford University Press). Zloch-Christy, I. (Ed.) (1995) Privatization and foreign Investment in Eastern Europe, (Praeger Publishers). Zloch-Christy, I. (1998) Eastern Europe and the world economy: challenges of transition and globalization (Edward Elgar). Zubek, V. (1997) 'The end of liberalism? Economic liberalization and the transformation of post-Communist Poland' Communist and Post-Communist Studies vol. 30 no. 2. pp. 181-203.

23

Notes 1

The institutions of law and private property are precisely presuppositions of the state in civil society through which the principles of individualism can be constituted and consolidated. Hence there is an “isolation effect” of state policies that facilitate the fragmentation and atomisation of social agents through the capitalist labour process. 2 Stiglitz refers to the neoliberals as market Bolsheviks who ‘with the right textbooks in their briefcases … would be able to fly into the post-socialist countries and use a peaceful version of Lenin’s methods to make the opposite transition’, possessed of a ‘moral fervor and triumphalism left over from the Cold War’ (22). 3 Post communist state restructuring is primarily the result of a dominant, overly narrow methodological focus on the process of economic restructuring over the content. The foundational question and overriding goal of too much “transitology” is to explain how best to install the market economy in CEE and FSU. 4 I am particularly grateful to Greig Charnock for his suggestions on the issue of competitiveness. 5 For example, Visegrad 3, now 4, leaders have met regularly for informal discussions at Krynica, (Slovak Republic Government Office, 2003), ComputerLand, one of Poland’s leading IT sector firms has actively participated in the works of the Economic Forum in Krynica by organizing discussion panels for many years. 6 Neoliberalism became increasingly fashionable in the 1980s with a proliferation of translations of Friedman and Hayek and publications by key “reoriented” economists. This phenomenon known as politicization (upolitycznienie), had little concern with trade union issues, the lived experiences of communism or the day-today concerns of average citizens. 7 Gomulka, of the London School of Economics, co-designer of the Balcerowicz Plan; Rostowski, of CEU, Budapest, chair of the Macroeconomic Policy Council at the Polish Ministry of Finance between 1997-2001, who also served on the Board of Trustees of the Centre for Social and Economic Analysis (CASE) in Warsaw, and was a member of the European Shadow Financial Regulation Committee, the European outpost of an American neoliberal institute of think tank style academics, and journalists from major financial papers whose agenda is broadly definable as financial/public policy deregulation. 8 This should not be taken to imply that there were no alternative concepts of control articulated, (Dahrendorf, 1990; Bozyk, 1992; Aslund, 1999) 9 Balcerowicz would eventually concede the necessity for political engagement, leading Unia Wolnosci - the Freedom Union party - from 1995. However since 2000 he has again reinsulated himself from politics in his role as Chairman of the National Bank of Poland.

24