Poles had been learning capitalist economics long before it became a part of the official state policy. Their ‘school of life’ was the black market, especially difficult in the Eastern context due to cultural differences and physical distance, but at the same time very lucrative.
The first million
Trade flourished not only in Europe but also in India, Turkey, Russia, Thailand, Singapore, and Taiwan, and the money generated in this exchange – admittedly illegal but increasingly willingly accepted by the authorities – was enough to become important investment capital after the Polish borders had opened. An illustration may be currency reserves located in private bank accounts in 1987: they totalled 2 billion dollars (the same amount was probably kept outside of the banking system). Many businessmen who were then or who still are crucial shareholders of the market started their careers in India or other Asian countries having gained their ‘first million’ there and, what’s important, having learnt the rules of capitalism.
The example of India, in particular, demonstrates that before 1989 the terms ‘legality’ and ‘illegality’ were very volatile, while official government contacts in fact facilitated unofficial trade carried by citizens. The starting point for mass smuggling was international cooperation on the governmental level, which was initiated virtually right after India regained independence in 1947 and developed further after the Polish Thaw in 1956. Following governmental contracts and support offered by ‘the socialist camp’ to ‘young democracy’, we exported technologies, weapons, goods, and architecture to the Indian subcontinent – all these being markers of modernisation and progress.
The five-year trade agreement from 1960 stated that Poland was obliged to provide complete industrial buildings and equipment in exchange for ore, cotton, tea, etc. In the same year, Polish Osa scooters and an SHL motorcycle took part in an Indian race, while CEKOP signed a contract to export scooters and motorcycles. After necessary adjustments, vehicles produced in Poland were made available on the Indian market, and later they were produced by Rajdoot – a local company licensed by the Polish producer – in several versions until 2005; they are still today very well received. Subsequent contracts concerned expansion of the existing coal mines and the construction of new ones, export of heavy extractive machinery as well as the construction of an entire power station. This is how a seemingly underdeveloped part of Europe modernised Asia – perceived back then as global peripheries.
A window on the world
One of the elements of this modernisation were visits of Polish economists to India, e.g. Oskar Lange and Michał Kalecki who, in the late 1950s and early 1960s, worked as advisers to Jawaharlal Nehru, the first Prime Minister of India. They used the experiences of Poland, an underdeveloped agricultural country subjected to forceful industrialisation, to provide the subcontinent with development plans much different from the communist dogmatism. Then – until 1968 – Lange, Kalecki, and others lectured in the Centre of Research on Underdeveloped Economies at the Warsaw University and the Main School of Planning and Statistics – institutions hosting several economists from Asia. Scholar Błażej Popławski called the Polish School of Development ‘a forgotten paradigm of the studies on the transformation in the Global South’ and its members – ‘pioneers of post-colonial studies in Central-and-Eastern Europe’.
At that time, India opened widely its borders to Polish citizens by introducing free visas issued practically ‘on the spot’. The subcontinent became ‘a window on the world’ to Poles: while the Eastern route allowed them to circumvent the Iron Curtain in the West, India rapidly became an object of cultural fascination. The actions of the Indo-Polish Friendship Association were backed by the authorities and, among others, contributed to the bloom of a phenomenon we called the ‘socialist New Age’ which advocated the hippie subculture.
This phase of the mutual interaction culminated in 1978 when a new Polish Embassy was erected in New Delhi on the basis of the modernist project by Witold Cęckiewicz. The building even made the ambassador of the USSR envious having turned into a spectacular symbol of the visual language of ‘socialist modernity’. At the time of its opening, the Polish economy, anchored in loans and credit, was already plunging into a deep crisis; consequently, the official friendship and contacts fostered the development of unofficial channels of exchange, which filled in the gaps in our market. Its pioneers were Polish mountaineers who – to a large extent – financed their successes with money from smuggling. As one of them, Wojciech Kurtyka, said, ‘the act of smuggling is the act of freedom’. We stuffed a Jelcz truck with 12-14 tons including 6 tonnes for smuggling, of course. […] It was enough to sell one winter jacket to have means for living in Poland for one month’, adds great mountaineer Krzysztof Wielicki in the documentary The Art of Freedom.
The transformative computer
After martial law was lifted in 1983, it was not possible for the Polish economy to come out of the slump, so even members of the Polish United Workers’ Party (PZPR) were aware of the necessity to turn a blind eye to the illegal trade which rescued citizens in the times of chronic inefficiencies. Its development, therefore, was also officially approved through the gesture of expanding the range of LOT flights to Asia (e.g. to Singapore) and opening the Polish airline’s permanent office in New Delhi.
This also stemmed from the fact that around 1985, the authorities of the Polish People’s Republic recognised computerisation – with the support of dignitaries such as Aleksander Kwaśniewski – as an important element of the transformation. The RSW Prasa Książka Ruch, an enterprise directly subordinate to PZPR and providing the party with enormous (but still insufficient to cover its budget) profits, started to publish a computer magazine, Bajtek. Computer exchanges and private shops with computer equipment were supplied with goods mainly from the East, due to the Western embargo on such technologies. At that time India became a stop on the way to Singapore – increasingly the source of computers and electronic equipment such as VHS players and cameras. Many Polish people also travelled between Delhi and Singapore smuggling gold to still quasi-socialist India and earning large amounts of money to be further reinvested in Poland. One of our interlocutors (wishing to remain anonymous, like other smugglers) recalls that he started to make money this way in 1986 when Poland was in a deep crisis. ’My Polish boss lived in Singapore in a 150-metre flat with a swimming pool – this was his standard of life. One trip gave the boss 150,000 dollars and he had 10% of this amount as profit, around 10% of the difference resulting from the current rate of gold. In two months I earned 10,000 dollars and the boss had 5 hangers-couriers – so you can imagine how much money he made’.
In this period, the exchange vectors got reversed: whereas socialist cooperation allowed us to export quasi-Western modernity to the East, in the 1980s substitutes of Europe were rather imported from Asia. The power system which defined peripheries was undergoing a deep change; a new map of the world was slowly emerging, the process of which is now visible in the stage of full globalisation.
In 1987, within the frames of the ‘second phase of the reform’, PZPR opened the market more widely and wholesale goods smuggling became even easier. Supply shortages in shops were more and more often supplemented by the black market: exchanges and bazaars like Skra in Warsaw, known as the ‘Persian fair’, were full of goods not only from India but also Singapore, Taiwan, and Hong Kong. From 1988 the Communist Party itself functioned through the network of freshly established partnership companies, e.g. the famous Transakcja trading with the Far East and importing high numbers of cotton products from Asia. Polish mountaineers were opening the first ‘India shops’ in Poland, which, apart from typical Eastern garments, offered clothes by Western brands produced on the subcontinent. Accounts of people buying in these shops in the early 1990s indicate that these places gave the opportunity to get dressed in the European, Western style. The data show that in 1988 approximately 6,000 Polish people travelled to India – three times more than ten years earlier, while 150,000 Poles – 5 times more than a decade earlier – went to Turkey. They had already learnt capitalism before 1989 – before the round table and the first elections – still more in the East, nearer or further, than in the West.
This way, at least by 1993 – the year of the introduction of the Unfair Competition Act (including trademark protection which helped begin a fight with imitations) – synonyms of the West were imported from the East. They were delivered via channels generated under the official Indo-Polish cooperation and extended further thanks to the development of Polish airlines. The official socialist modernisation discourse propagated by the Polish authorities in India transformed into so-called ‘appropriation’ by PZPR (through the network of partnership companies), which means applying capitalist practices – already exercised in Asia by Polish citizens – by the ruling party itself. The ensuing stage of these changes was a complete transformation into a market-oriented economy, in the sphere of everyday life as well.
The historical collapse of communism was a long-term process. The transformation was stimulated not only by Western culture and politics officially referred to by the Polish authorities after 1989; analogically, the East was a space of searching and testing new patterns of life – later the Eastern experience has practically been superseded from the official narratives. The common tendency to forget or not to mention the long-time Indo-Polish relations is an element of the everlasting problem of mentally turning our back on Asia and trying in vain to build our identity on the Western norms only. In the era of yet another attempt to reevaluate the Polish identity and geopolitical position, it is important to remember about its several variants functioning in the past.
Written by Max Cegielski, Jan 2017