The Plan of Reconstructing the Economy (Polish : Plan Odbudowy Gospodarki), commonly known as the Three-Year Plan (Polish : plan trzyletni) was a centralized plan created by the Polish communist government to rebuild Poland after the devastation of the Second World War. The plan was carried out between 1947 and 1949. It succeeded in its primary aim of largely rebuilding Poland from the devastation of the war, as well as in increasing output of Polish industry and agriculture.
Poland suffered heavy losses during World War II. In addition to significant population losses, [1] it suffered catastrophic damage to its infrastructure during the war; the losses in national resources and infrastructure amounted to over 30% percent of pre-war potential. [2] Rebuilding of the economy was also made more difficult by the major territorial changes of Poland after World War II. [3]
The Three-Year Plan was developed and monitored by the Central Planning Office (Centralny Urząd Planowania), a body of the government tasked with creation of economic policy, and in the early years dominated by a more liberal Polish Socialist Party (PPS) faction. [3] Among the economists involved in its development was the then CUP director, Czesław Bobrowski. [3] CUP centralized planning for the entire Polish economy was previously broken into separate bodies working on planning for separate branches.
The plan, significantly influenced by the PPS, [3] was designed to create a balance between the private sector, the public sector and the cooperatives. [3] Instead of ideology, commonly stressed by later communist plans, it concentrated on the realistic problems and ways to address them. [3]
On 21 September 1946 the State National Council (KRN), a Polish communist-dominated unelected Polish parliament accepted the plan for the Polish economy up to 1949. On 2 July 1947 the newly elected Sejm declared that: "The primary goal of the national economy in the years 1947-1949 is to raise the living conditions of working classes to above the pre-war levels."
The plan as described by the above bodies was designed to develop industry and service sectors, foreign trade and ensure the supply of basic consumer items. The plan specified the size of industrial and agricultural production to be achieved in the following years. In 1949 both the industrial and agricultural productions were to be above the pre-war levels. The industrial output was also to be higher than agricultural output. The plan did not involve creation of new industrial centers, only the rebuilding of the old ones (unless they were over 50% destroyed). [3]
Due to the dedication of substantial resources to industrial rebuilding, and the successful adoption of the Stakhanovite movement (the communist propaganda of that time created a new "hero of the working class", Wincenty Pstrowski), where workers were encouraged to work above their quota, the expected increase in industrial output was reached ahead of schedule. [3] However, the agricultural output did not increase as much as predicted, [3] partially due to bad weather in 1947, partially due to inefficiencies involved in collectivization of farming and finally, partially due to side-effects of the battle for trade, which damaged traditional supply chains. In 1948 industrial production was 30% higher compared to 1939, but agricultural production was 30% lower (compared to the 1934-38 period). [3]
The battle for trade, pushed for by Stalinist hardliners like Hilary Minc, suggested that both the cooperative and private sectors should be eliminated and the public sector should be dominant, [3] [4] assumptions contrary to the foundations of the three-year plan which stated that all three sectors are equal. [3] The battle for trade also resulted in a decrease of the craftmanship sector. [4]
Already in 1949 the stress was moved from consumer goods to producer goods, and light industry development was slowed. The next plan in the Polish communist economy was the Six-Year Plan (1950–1956), much more critically assessed by modern historians and economists, as by 1950 the CUP and Polish government were dominated by Stalinist hardliners, and PPS economists responsible for creation of the Three-Year Plan were no longer influencing government policy. [3] [4] The Six-Year Plan, designed to bring the economy of Poland in line with the Soviet economy, concentrated on heavy industrialization, with projects such as Nowa Huta. [3]
Rebuilding of the Polish economy was also slowed in 1947, as Soviet influence caused the Polish government to reject the American-sponsored Marshall Plan, designed to aid European economies in post-war rebuilding. [3] [5]
With the simultaneous rebuilding of the cities, substantial migration from rural areas to urban centers occurred, increasing urbanization. Warsaw and other ruined cities were cleared of rubble and rebuilt with great speed during those years. [6] In 1939, 60% of Poles worked in agriculture and 13% in industry; in 1949, the figures were 47% and 21%, respectively.
The three-year plan is widely considered a success and the only efficient economic plan in the history of People's Republic of Poland. [3] It succeeded in its primary aim: mostly rebuilding Poland from the devastation of the war, as well as in increasing output of Polish industry and agriculture. [3]
The Marshall Plan was an American initiative enacted in 1948 to provide foreign aid to Western Europe. The United States transferred $13.3 billion in economic recovery programs to Western European economies after the end of World War II. Replacing an earlier proposal for a Morgenthau Plan, it operated for four years beginning on April 3, 1948, though in 1951, the Marshall Plan was largely replaced by the Mutual Security Act. The goals of the United States were to rebuild war-torn regions, remove trade barriers, modernize industry, improve European prosperity and prevent the spread of communism. The Marshall Plan proposed the reduction of interstate barriers and the economic integration of the European Continent while also encouraging an increase in productivity as well as the adoption of modern business procedures.
The Polish United Workers' Party, commonly abbreviated to PZPR, was the communist party which ruled the Polish People's Republic as a one-party state from 1948 to 1989. The PZPR had led two other legally permitted subordinate minor parties together as the Front of National Unity and later Patriotic Movement for National Rebirth. Ideologically, it was based on the theories of Marxism-Leninism, with a strong emphasis on left-wing nationalism. The Polish United Workers' Party had total control over public institutions in the country as well as the Polish People's Army, the UB and SB security agencies, the Citizens' Militia (MO) police force and the media.
The Eastern Bloc, also known as the Communist Bloc (Combloc), the Socialist Bloc, and the Soviet Bloc, was the collective term for an unofficial coalition of communist states of Central and Eastern Europe, Asia, Africa, and Latin America that were aligned with the Soviet Union and existed during the Cold War (1947–1991). These states followed the ideology of Marxism–Leninism, in opposition to the capitalist Western Bloc. The Eastern Bloc was often called the "Second World", whereas the term "First World" referred to the Western Bloc and "Third World" referred to the non-aligned countries that were mainly in Africa, Asia, and Latin America but notably also included former pre-1948 Soviet ally Yugoslavia, which was located in Europe.
The Polish Workers' Party was a communist party in Poland from 1942 to 1948. It was founded as a reconstitution of the Communist Party of Poland (KPP) and merged with the Polish Socialist Party (PPS) in 1948 to form the Polish United Workers' Party (PZPR). From the end of World War II the PPR led Poland, with the Soviet Union exercising moderate influence. During the PPR years, the centers of opposition activity were largely diminished, and a socialist system was established in the country.
In the mid-1980s, Communist Czechoslovakia was prosperous by the standards of the Eastern Bloc, and did well in comparison to many richer western countries. Consumption of some goods like meat, eggs and bread products was even higher than the average countries in Western Europe, and the population enjoyed high macroeconomic stability and low social friction. Inhabitants of Czechoslovakia enjoyed a standard of living generally higher than that found in most other East European countries. Heavily dependent on foreign trade, the country nevertheless had one of the Eastern Bloc's smallest international debts to non-socialist countries.
The economy of the German Democratic Republic was a command economy following the model of the Soviet Union based on the principles of Marxism-Leninism. Sharing many characteristics with fellow COMECON member states — the East German economy stood in stark contrast to the market and mixed economies of Western Europe, including West Germany. The state established production targets, set prices, and also allocated resources, codifying these decisions in comprehensive plans. The means of production were almost entirely state-owned. The GDR had an above-average standard of living compared to other Eastern Bloc countries or the Soviet Union, and enjoyed favorable duty and tariff terms with the West German market; in 1989, it was estimated that 50 to 60% of its trade was with Western countries. However by the mid-1980s its economy had reached a state of stagnation, contributing to the process of German reunification.
The history of Poland from 1945 to 1989 spans the period of Marxist–Leninist regime in Poland after the end of World War II. These years, while featuring general industrialization, urbanization and many improvements in the standard of living,[a1] were marred by early Stalinist repressions, social unrest, political strife and severe economic difficulties. Near the end of World War II, the advancing Soviet Red Army, along with the Polish Armed Forces in the East, pushed out the Nazi German forces from occupied Poland. In February 1945, the Yalta Conference sanctioned the formation of a provisional government of Poland from a compromise coalition, until postwar elections. Joseph Stalin, the leader of the Soviet Union, manipulated the implementation of that ruling. A practically communist-controlled Provisional Government of National Unity was formed in Warsaw by ignoring the Polish government-in-exile based in London since 1940.
Hilary Minc was a Polish economist and communist politician prominent during Stalinist Poland.
Economic planning is a resource allocation mechanism based on a computational procedure for solving a constrained maximization problem with an iterative process for obtaining its solution. Planning is a mechanism for the allocation of resources between and within organizations contrasted with the market mechanism. As an allocation mechanism for socialism, economic planning replaces factor markets with a procedure for direct allocations of resources within an interconnected group of socially owned organizations which together comprise the productive apparatus of the economy.
On the eve of the 1921 revolution, Mongolia had an underdeveloped, stagnant economy based on nomadic animal husbandry. Farming and industry were almost nonexistent; transportation and communications were primitive; banking, services, and trade were almost exclusively in the hands of Chinese or other foreigners. Most of the people were illiterate nomadic herders, and a large part of the male labour force lived in the monasteries, contributing little to the economy. Property in the form of livestock was owned primarily by aristocrats and monasteries; ownership of the remaining sectors of the economy was dominated by Chinese or other foreigners. Mongolia's new rulers thus were faced with a daunting task in building a modern, socialist economy.
Indicative planning is a form of economic planning implemented by a state in an effort to solve the problem of imperfect information in market economies by coordination of private and public investment through forecasts and output targets. The resulting plans aim to supply economically valuable information as a public good that the market by itself cannot disseminate, or where forward markets are nonexistent. However, indicative planning takes only endogenous market uncertainty into account, plans the economy accordingly, and does not look into exogenous uncertainty like technology, foreign trade, etc. Indicative plans serve to complement and enhance the market, as opposed to replace the market mechanism, hence they are adopted in market-based and mixed economies and were most widely practiced in France and Japan before the 1980s. When utilizing indicative planning, the state employs "influence, subsidies, grants, and taxes [to affect the economy], but does not compel". Indicative planning is contrasted with directive or mandatory planning, where a state sets quotas and mandatory output requirements. Planning by inducement is often referred to as indicative planning.
Edward Lipiński was a Polish economist, intellectual, social critic and human rights advocate. During the almost seven decades of his career, he held a series of academic and government advisory positions, founded several organizations, published books and essays on economic policy. His works concerned business cycles, growth theory, history of economic thought and other areas of economics. Lipiński was a fighter for Polish independence and a socialist activist in the Second Polish Republic. In the Polish People's Republic, Lipiński was an influential Marxian economist and a long-term member of the communist party. Outspoken in his criticism of government policies, he became active in opposition circles.
Czesław Bobrowski was a Polish economist. In postwar Poland, he was a director of Central Planning Office from 1945–1948, author of the Three-Year Plan. He was also a member of the State National Council (1945–1947) and Parliament (1947–1948).
Six-Year Plan (1950–1955) was the second centralized plan of the People's Republic of Poland, following the completed Three-Year Plan (1947–1949). It concentrated on increasing the heavy industry sector.
Industrialization in the Soviet Union was a process of accelerated building-up of the industrial potential of the Soviet Union to reduce the economy's lag behind the developed capitalist states, which was carried out from May 1929 to June 1941.
The Five-Year Plan was Argentina's strategy for economic planning during President Juan Domingo Perón's first term.
The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing. An administrative-command system managed a distinctive form of central planning. The Soviet economy was characterized by state control of investment, prices, a dependence on natural resources, lack of consumer goods, little foreign trade, public ownership of industrial assets, macroeconomic stability, low unemployment and high job security.
Soviet-type economic planning (STP) is the specific model of centralized planning employed by Marxist–Leninist socialist states modeled on the economy of the Soviet Union.
Deindustrialisation refers to the process of social and economic change caused by the removal or reduction of industrial activity and employment in a country or region, especially heavy industry or manufacturing industry. Deindustrialisation is common to all mature Western economies, as international trade, social changes, and urbanisation have changed the financial demographics after World War II. Phenomena such as the mechanisation of labour render industrial societies obsolete, and lead to the de-establishment of industrial communities.
The economy of the Socialist Republic of Romania was centrally planned, similar to the one of the Soviet Union. Most of the means of production were owned by the state, which established production plans as part of the Five-Year Plans.