Kowalik Vortrag Notes. 
Balzerowicz when he announced his reforms said the stabilisation would 
take 1/2 year, the restructuring 2 years. 
The recession was deliberately engineered. Balz. said he needed the 
recession for restructuring and privatisation.He was inspired by 
"creative destruction" (Schumpeter). But, Kowalik says, this was creative 
destruction by the state, a new kind of etatistic liberalism. Industry 
was systematically deprived of funds needed for even small investments 
and repairs: 90 % of gross profits of industry were taken out by the 
state. Consumption in 1990 was reduced by 28 % ( data based on a regular 
household survey embracing 40 000 families ). Thus there was 
decapitalisation of both enterprises and households. 
The privatisation had started already under the last two communist 
governments. This was the enfranchisement of the nomenclature. They 
bought the undervalued assets. 
After the change in regime the nomenclature were different people - 
connected with the Solidarity -but the principle was the same. It was a 
privatisation of the public sphere - of the state. Walesa said we 
never had such corruption in all the Polish history and if you consider 
that the state property was 80% of the national wealth this may not be 
exagerated. 
Since 1981 we have had the self management movement, rather a kind of 
participation. This was deliberately dismantled. The 200 enterprises 
which had been managed in this way did not show any improvement in 
efficiency after they were returned to former status. 
400 enterprises found prospective buyers but half of them withdrew. Ideas 
to hire foreign managers (banks etc) to run the holdings of industry. 
Government kept saying there is no alternative. There is growing 
nostalgia for the communist past. 
Kowalik pleads for a negogiated economy. 
Germany needed 10 years to restructure their war industry. 
The present inflation is still 78% per annum. The cost of the whole 
business has been excessive.