Leszek Balcerowicz Lecture

May 6, 2010

Leszek Balcerowicz (pronounced bal-tse-ro-veech) is a Polish economist. As Finance Minister and Deputy Prime Minister of Poland from 1989-92 he introduced a series of sweeping reforms that brought Poland’s hyperinflation under control and balance to the national budget. However, he remains a controversial figure in Polish history. His “Balcerowicz Plan” was introduced on January 1, 1990 and soon led to a serious collapse in living standards and sparked industrial unrest. Considering him a liability, Lech Wałęsa (first Polish President after the fall of Communism) pushed him out of office in ’92. Nonetheless, Balcerowicz’s ‘economic shock therapy’ program succeeded in stabilizing the currency and introducing the first stage of marketization in Poland. In addition, he had tried something that had never been done before: the first comprehensive implementation of market reform in a postcommunist country.

Having written papers about his shock therapy program, and reading a lot about his economic reform policies, I had to go hear him speak at the University of Łódź. His lecture was called Kryzys: przyczyny, skutki, wnioski (The crisis: causes, effects, solutions).

The lecture was held at UŁ’s Department of Law and Administration building – their newest addition to the university. It’s architecturally stunning. The lecture was very interesting, with the Greek economic crisis as a main topic. As a speaker, Balcerowicz is strong, forceful, organized, but humorous – entertaining and interesting at the same time. One lady asked what managers of businesses can do to safeguard themselves from the crisis. This was actually part of a larger question, and Balcerowicz didn’t end up answering it. So, the lady asked the same question again at the end of the discussion panel- to which he replied, “Mental determination? I don’t know. I’m interested in things that you can prove empirically, with numbers and quantities, so when I get a general question like that, my answer is also general.” I thought this was hilarious… he is such an economist.

But his most important point in the lecture was that Poland’s upcoming presidential election will definitely have an effect on its economy. He said that even though Poland was the only European country with positive GDP growth (1.8%) in 2010, it must make sure to elect a fiscal conservative on June 20th. The most important lesson Poland can learn from the Greek crisis, and what’s been going on in other European countries, is to make the right choice in voting – that voting will make the biggest difference. He warned against “Santa Claus politicians” who will make empty promises; he stressed that what’s necessary in these times is a fiscal conservative.

He also touched upon a subject that I’ve become interested in during my year in Poland: the retirement age. The fact that women are eligible for retirement at 60 and men at 65 is an economic, as well as a moral and ethical, problem. The longer people work, the longer they pay taxes, the more revenue the country receives. I totally agree with this point. Workers of some professions are eligible for a state pension after only 15 years of employment. Ridiculous. Let me illustrate the absurdity of this: a 25 year-old firefighter will be retired at the age of 40.

At any rate, the lecture was very good – slightly oversimplified, but straightforward and to-the-point. I like this guy.

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