From Free Life, Issue 19, November 1993
ISSN: 0260 5112

Jacek Sierpinski is a student at the University of Silesia in Poland, and an activist in the anarchist movement An Arché, an informal group of free market activists, libertarians, pacifists, "greens" and "counter-culture" youth.

Western libertarians often tell me how much they admire the privatisation programme currently operated by the Government of my country. This surprises me. What we have here in Poland is nothing more than an arbitrary and often corrupt sale of stolen goods.

The acceptance of such privatisations denies the legality of property titles. It means accepting the State as the legitimate owner of stolen goods, as this is the only way of accounting for the legality of ownership of privatised goods. And by doing so, the State as Lord High Thief and Murderer is itself legitimised.

I ask - To whom do the goods stolen by the State belong? I could answer - To those from whom they were stolen. But governments have been stealing for quite a long time now, and it is only in a minority of cases that the original owners or their heirs or assignees can be found.

Therefore, I prefer that what goods cannot be restituted should be abandoned by the State - that it should place them in the state of nature from which they can be abstracted by interested individuals with unpolluted titles to ownership. Leaving aside John Locke with his example of the Indian gathering acorns in the American forest,1 this is an established principle of Roman Civil Law and of the Polish and other civil codes based on it.

This solution, if not the abolition of states, would be a great check to their pretension to decide who shall and shall not own property. Libertarians, I suggest, should press by all means available - both legal and illegal - for its putting into effect.

Of course, for "libertarian" conservatives, like the members of the Polish Union of Real Politics (UPR), state privatisation is largely acceptable for the simple reason that for them the State is a legitimate institution and consequently the legitimate owner of what is to be sold.

It is also acceptable to pragmatic utilitarians, even those who are anti-statist. For them it is less important that property titles should be morally justifiable than that private is better than public ownership;

But the acceptance of such standpoints means, in my opinion, the rejection of the libertarian ethic. State possession is unacceptable not because it is any different from or worse than private possession: the nature of possession is identical in both cases. The point is that the largest possible number of goods should be in the possession of those morally entitled to them.

The only instance of a state privatisation that might, in my opinion, be accepted in practice is if the State should hand stolen goods to those currently using them. If it were to resign these goods, it is most likely the users would take them over and they would thus become the legitimate owners. But a state privatisation is never genuine and it always raises doubts.

Certainly, the privatisations so far carried out in Poland have been most unsatisfactory. Indeed, they have been made a means of reinforcing rather than of diminishing state power.

This was shown explicitly by Jan Krzysztof Bielecki, a former Prime Minister. In an interview for the daily newspaper Gazeta Wyborcza. He found that "organs of workers' self-government managing state enterprises are not able to overcome attitudes hostile to the state".

Now, in Poland, since 1981, traditional "state enterprises" have actually been independent corporate bodies managing economic activities on their own account, and using state property to this end; they are something like workers' cooperatives, with an understanding that the Government keeps some powers, for example in appointing the managing director. Therefore, Mr Bielecki explains, "proprietary transformations" should be carried out upon these businesses.

Here then we have it! State property ought to be handed to people who will favour the State. Is this privatisation? If it is, should not libertarians at least reconsider their attitudes towards it?

Proprietary transformations most often consist of a transformation of a state enterprise into a "one-body

company of the Treasury". This brings an increase of state control over the business: it becomes a state "property" and gets handed over to the management of the board of directors appointed by the Government. A few of these one-body companies of the Treasury are afterwards privatised by a sale of stock; benefits from the sale go to the Treasury.

The other way of privatising is the liquidation of a state enterprise by handing a property used by it to a new proprietor - usually the workers' company - but not without gain: the property is only leased out. Thus the State receives additional money instead of completely renouncing pretensions to goods used by the business.

The only exception so far has been the liquidation of the press concern RSW: many press titles were given away to political parties, especially parties from the ruling colation. I ask again - Is this corrupted enterprise something that libertarians should receive with transports of joy?

The programme of general privatisation promoted by the former Minister of Privatization Janusz Lewandowski and those who followed him is, in fact, a programme of general bureaucratisation. They propose to call into being ten to twenty gigantic concerns - to be called National Property Funds2 - which would be the owners of all the current state enterprises. The Government would have 30 per cent of each business's stock. The stock of the Funds themselves would be distributed to all the citizens but provided that during the next few years the stockholders would not have any rights to a dividend or to appoint the board of directors.3 Naturally, this would be the right of the Government.4 Stockholders would also probably not be allowed to trade or transfer their stock during this period.

It should be added that it is not only the Government and its servants who propose privatisation in Poland. For example in 1990 an economist, Professor Rafaþ Krawczyk, proposed an immediate and general privatisation which would involve unconditionally handing over 51 per cent of the state enterprises' stock to its workers and distributing the stock of the state banks to all the account-holders in proportion to their holding. But - naturally - his proposal was rejected by the ruling party, and the mass media submitted to its decision.

The Government officially says that proprietary transformations are necessary because state enterprises are inefficient. According to the authorities the current paralysis of the Polish economy results from a lack of adaption of state enterprises to the requirements of the market. But this is a lie. Polish businesses have low incomes and sustain losses mainly because of horrendous tax oppression and regulations made and enforced by the Government. These do not affect state businesses alone, but these are the most heavily encumbered with taxes.

Leaving aside income tax from corporate bodies and various turnover taxes, state businesses (both traditional and one-body companies of the Treasury) have to pay a tax on used goods, the dywidenda, a dividend (which has nothing to do with a dividend in joint stock companies.) They must also pay a tax on supernormative/supernumerary wages, the popiwek.

One example is the large company Polska Miedþ which is a one-body company of the Treasury: it has to hand 86 per cent of its income to the Government. The average wage paid by this company amounts to about three million zloty per month, which is about US$250. If the State did not extract money from the business and the proportion between wages and investments were as now, the average monthly wage would amount to about $1700, and funds for investment would be about seven times higher.

When in July the employees of this business began a strike, as the workers in many other state enterprises have done, and the trade unions demanded the abolition of the popiwek and dywidenda, the Government said that it was not a party to the suit, and that wages could be raised only at the cost of losing funds for investment. Strikes will probably therefore only result in a maintenance of the status quo or in raising wages at the cost of investments - and the poverty, the recession and the paralysis of the economy will continue.

Individuals, although they do not have to pay the above taxes, have to bear the cost of taxes for social insurance and various turnover taxes on trade and services, together with customs and excise and other impositions. Officially taxes are supposed to be a means of balancing the state budget. But the Government makes the people believe there is only one alternative: either a balanced budget under high taxes or, under low taxes, a budget deficit financed by inflation.

Yet the Government does nothing to privatise what it now finances - education, medical services and social insurance, not to mention the police, the UOP (political police), the army and the state administration. As a last resort, if money is short, it cuts pensions or funds available to hospitals or schools. If the Government really wanted a rapid privatisation it should start by retiring from this sphere.

At the same time the Government is interfering more and more with the market, periodically issuing new regulations, licenses and prohibitions. The latest coal-mine strikes were caused in part by placing limits on the export of coal that made the sale of coal abroad impossible - no wonder the mines had no money. The former Minister Adam Glapiþski, issuing licences on the import of fuel, said that "from now on there will be authentic free competition instead of a wild, anarchised market".

If anyone believes the policy of the Polish government is a policy of free-market reform, he is mistaken. This policy is one of staticisation, bureaucratisation and theft under liberal and capitalist slogans - just as was Communist policy was under socialist slogans.

Notes

1. John Locke, Second Treatise (1690), para. 28; in Peter Laslett (ed.), Two Treatises of Government, Cambridge University Press, Cambridge, 1960, pp. 306-07.

2. Currently, National Investment Funds.

3. Currently the project makes the provision that the stock of funds will not be distributed before 1994. By then funds will be state businesses.

4. The boards of directors of the National Investment Funds will probably be financed by the state budget.