- Mateusz Medyński
Polish Economy slowing down? Why is this still a shock for people?
The Polish economy is slowing down because the world economy is slowing down. Poland is connected with the world more than many would care to admit and yet we are constantly surprised when a slowdown is reported. Moreover, Poland is in thralls of a lingering civil war between the ruling party and their supporters vs. everybody else (although 50% of Poles still cling to the illusion that politics do not interest or impact them at all). Whoever wins, any form of conflict does not bode well for the economy. Recent data indicate that investments are slowing down in Poland, with both foreign investors stalling on their projects and local companies postponing their plans. And apparently giving away public money to people did not work to get the economy going in the long run (although for a short while it did a lot to stimulate internal consumption and therefore growth). Why is anyone surprised at this? When has giving away money ever worked (long-term) in the history of mankind?
The answer is never. Giving people free money (Milton Friedman’s “Helicopter money”) may be a good way to jump-start an ailing economy but is never a good idea if we want to keep that economy going. And the term “free money” is actually used ironically here. Such money is never free. Want to know more? Read the Dictator’s Handbook by Bruce Bueno de Mesquita and Alastair Smith (contrary to the tile it is not only about dictators but about gaining and keeping power in any system – including democracy, the rules are really simple and apply to everyone). Whatever we dole out now to ourselves, our children will need to pay back ten-fold. In that way any debt we incur but somebody else will repay can be seen as free money (but only for us).
It seems that investors, even in Poland, do not like it when somebody tampers with the justice system or organises state enterprises as a family business where power and money goes to the most loyal and not the most competent. It does not matter which political party does this, the right or the left. It is always a bad idea. And when the economy falters due to such mismanagement people are always surprised. This happens everywhere and has done so for the past 2000 years. Why are we constantly surprised?
My friends recently told me that they are postponing building their house because if the situation in Poland keeps changing the way it does now, they may leave the country and find a place to work abroad in peace and quiet so a house in Poland would only tie them down. What if a million Poles started thinking that way? What if that million Poles had their own businesses and decided to close them and leave. Maybe they already are. We had two large migrations these past 10 years and some 6 million people have left the country, never to return. Mostly young and entrepreneurial people. For whom are investments in the Polish economy to be made I wonder if the middle class packs up and leaves? Who will support the economy? Will the private sector pack up and leave altogether to be replaced by state ownership? Are we on a track back to people in Poland being employed either in public administration or state-owned companies because the private sector ceased to exist? We already participated in this experiment during the communist era and it did not work. So what are we doing to get the young people to stay in Poland and contribute to the economy? Whatever we decide, we better do it soon, or there will be nobody left.
For more interesting information about our economy please read: https://wyborcza.pl/7,155287,25645214,walka-z-sadami-uderza-w-gospodarke-wzrost-pkb-w-iv-kwartale.html
https://www.pb.pl/przedsiebiorcy-obawiaja-sie-zagrozen-wewnetrznych-982162