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"Shock therapy" entails real societal shock

November 14, 2002

The far-reaching social transformation from socialistic planned economy to capitalistic market economy with the help of "shock therapy" in Poland 1989 constituted a shock for the entire society, including state, regional, and local authorities, and many institutions, such as employment exchanges. This is shown in a new dissertation from Göteborg University in Sweden.

In her study Employment service in transition: Adaptation of a socialist employment agency to a market economy. A Case study of Lodz, Pland, 1989-1998, the researcher Iwona Sobis analyzes one of these institutions, the employment agency in Lodz and how its personnel perceived and coped with growing unemployment in the light of a new labor market policy in line with the market economy. What did the personnel do when 86,000 unemployed people stormed the office to seek help and means to survive? Questions asked in the dissertation are: What problems did the staff at the employment agency find the most difficult to solve? What questions were local in character and what problems were consequences of new government labor market measures? Where did the staff find inspiration, pragmatic ideas or models for adapting the employment exchange to the market economy? What forces proved to have the greatest impact in creating a modern employment exchange in the Western sense? What modern employment-exchange model was it possible to achieve in 1997-98? Sobis also elucidates what happen to the formal organization during the process of transformation, and in what way the European Union and other Western organizations contributed to the adaptation of Polish labor market policy and the employment exchange in Lodz to the market economy and the EU's institutional and organizational standards.

In her dissertation Iwona Sobis describes the origin of the process of transformation and its roots in anti-communist social movements under the flag of Solidarity, roundtable discussions between the opposition and the regime, the first democratic elections, and the introduction of shock therapy, which the leaders and followers of Solidarity perceived as a way out of the political and socioeconomic crisis and a return to Europe.

The study makes it clear that the Polish government was not alone in having visions of the country returning to Europe. Many Western organizations also had ideas of their own about the integration of Europe. The EU's "PHARE" Program proved to be an influential force behind various adaptation strategies at the macrostructural level in Poland and at the employment agency in Lodz. However, the study also shows that Western theory is not always appropriate for the socioeconomic reality that prevails in a country based on a liberal market economy with no capital. Close cooperation between Western consultants and Polish state, regional, and local authorities was necessary and helped adjust labor market policies and a network of employment agencies in Poland to EU standards.

Iwon Sobis' dissertation is especially relevant today. The reason is that the EU has now confirmed that several post-communistic states will become members of the Union in 2004. Moreover her thesis fuels reflection about the true power relations in Europe and strategies for adaptation to EU requirements, not only in the post-communist bloc but also among present members of the EU. We are now hearing more and more critical views in the Swedish press regarding Jacques Chirac's proposal to transform the EU to the United States of Europe in connection with the expansion of the EU.

Vetenskapsrådet (The Swedish Research Council)