Two Kinds of Capitalism

"Parasitical capitalism is one thing, productive capitalism another. A kulak, the village leech, is miles apart from a village capitalist of the farmer type. Our program should include support for those capitalists who multiply the national income, who derive profits from a constant increase in productivity."

This kind of crazy mixed-up Marxist talk came last week from Polish Economist Jan Danecki. Added another Polish economist, writing in Warsaw's Express Wieczorny: "Certainly Socialism [i.e., Communism] will not tumble down if haberdashery, carpet slippers, little screws and tubes are manufactured by private concerns. Besides, they will make them properly, because if the goods are bad they cannot sell them."

In Poland's confused state, nothing is sure except that the old-style Communism does not work. Party Secretary Wladyslaw Gomulka's economic planners no longer ask "Is it orthodox Marxism?" but "Will it work?" To get the sagging Polish economy working, they are encouraging many forms of small-scale capitalism, decentralizing state-owned industry, and letting independent peasant cooperatives take over the thousands of abandoned collective farms.

Service Pays. Six months ago the Polish storekeeper, plagued by discriminatory taxes and unable to replenish his stocks, was a member of a dying class. Today several thousand private shops are flourishing. Private individuals have taken over bankrupt state catering establishments, opened restaurants and cafes, and by substituting service for the state attitude that the customer is always wrong, are making them pay. In Warsaw private enterprise is building a new market, a new shopping center, and the city's first private department store since 1945.

Thousands of small consumer-goods factories, encouraged by state credits and promises of two years' tax exemptions, are springing up all over the country. By 1960 it is expected that half a million people, or some 7% of the country's total labor force, will be employed in these private firms.

By controlling credit, raw materials and retail prices, the government still plans to keep a firm grip on the country's economy: its concessions are more from necessity than from any coherent new economic philosophy.

Worried Neighbor. Across the eastern border the Russians are watching this strange sight uneasily. The mixed economy is not a new phenomenon, but an expedient, in Soviet politics. In 1921 Lenin's New Economic Policy (NEP) tolerated private enterprise, but when Stalin thought the economy was sufficiently on its feet again, he ruthlessly liquidated every vestige of free enterprise. In Red China today, Party Leader Mao Tse-tung tolerates a controlled capitalism for the same purpose.

But the spirit of the Polish experiment bothers the Russians. Criticism in the Moscow press, relatively mild and scoffing at first, is hardening. Last week Pravda spoke menacingly against Poland's new economic program and the "future of the kulaks." In Warsaw, Party Secretary Gomulka, a sensitive barometer of fair winds and foul, warned his newspaper editors against questioning the principles of Marxism and Leninism and denying the Socialist character of the Soviet Union. But, in curbing the "revisionists," Gomulka made no promise of halting all revision himself. Nor could he.

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