Mariusz Trojak: Through The Economic History of Poland (Episode 15)

Podcast Details:

Guest: Mariusz Trojak

Date Added: 20th Aug 2015

Length: 82 min, 13 sec

Summary:

ProjectKazimierz presents Mariusz Trojak, with Richard Lucas and Sam Cook. Mariusz is a professor of economics at Jagiellonian University in Kraków. They discuss economics and the changing economy of Poland pre- and post-war. Richard analyzes the way government can assist or hinder entrepreneurship and business growth. Sam discuss the effect of Communism on Poland and Mariusz explains why the effect was positive.

Table of contents, resources and links:
Resources and links:

 

Table of contents:
Economic Background
  • 00:47 Sam’s intro
  • 01:25 Sam introduces Mariusz
  • 02:11 Sam’s story/journey in Krakow
  • 03:03 Subject of podcast
  • 04:01 Richard’s background
Journey through Polish history
  • 08:31 Poland original economic rebirth
  • 10:52 Patriotic background of Poland
  • 11:32 Ask your citizens to donate for army
  • 12:22 How Polish nation has been reborn
  • 13:55 Economic growth in 20’s
  • 15:30 Diversity of Polish regions
  • 18:48 Belarussia’s experience
  • 19:11 Kind of freedom in Poland in 1991
  • 21:19 Class society
  • 23:27 Upper class influence on modern society development
  • 24:16 Austrian-Hungarian Empire time/impact
End of communism
  • 26:38 Artistic spirit of Krakow
  • 29:00 Soviet Union tech educational tradition in Poland
  • 30:18 Reason of strong human assets in IT business
  • 31:57 End of communism
  • 34:21 What did German neighborhood bring?
Poland and former Soviet Union states
  • 35:20 Poland and Ukrainian paths
  • 36:50 Key reasons of economical growth in Poland
  • 39:06 Why is Poland diffrent from Ukraine and Russia?
  • 42:38 Polish are lucky
  • 44:17 Victims of reforms
Relation between financial institutions and entrepreneurs
  • 47:27 Crucial things for development: people, motivation, government support
  • 51:27 What was missing in Poland?
  • 53:10 Relation between financial institutions and entrepreneurs
  • 55:26 EU investemnts in Poland
  • 57:23 What’s the use of new motorway if you have nowhere to go?
  • 59:00 Idea of bank guarantees of risk investments
Poland in international context
  • 01:02:53 Polish students became international
  • 01:05:10 Take the chance that we never had
  • 01:07:04 Globalization matters
  • 01:08:20 Stereotypes about Poland
  • 01:11:38 Social mobility
  • 01:13:29 Story about police officer from London
  • 01:14:09 Western system is superior
  • 01:15:40 Stadium of hate
  • 01:16:44 Short summary
  • 01:18:43 People do care about the country
  • 01:21:50 Outro

Transcript:

00:47
sam cook:
Hello again Project Kazimierz listener, this is Sam Cook with my co-host Richard Lucas again for another episode. How are you doing Richard?
00:55
richard lucas:
Very well, good evening everyone.
00:56
Sam:
Alright, or whatever time of day it is you choose to listen to this.
01:01
Richard:
It’s a beautiful evening here in Kraków so you are getting, it’s the 2nd of June 2015 if you are listening on … and at that time on planet Earth in Central Europe we have sunny evenings.
01:12
Sam:
Which is rare sometimes in May and June.
01:15
Mariusz:
Come on…
01:17
Sam:
If you haven’t heard the coldest weather is a bit – anyway, great weather this summer. Alright, we are here today with professor Mariusz Trojak, I’m going to let you pronounce your last name if you mess that up.
The reason I am introducing Mariusz today is, breaking the tradition, I actually brought a guest finally to the podcast so we are not relying on Richard for everything for that respect. Also Richard Lucas is here after, I think this is the first episode we’ve recorded after the TEDx Kazimierz which was a rousing success and I’d like to talk a little bit about that at the end.
But the reason that we are doing this podcast today with Mariusz is Mariusz is one of the first people that I met here when I moved to Kraków back in September 2014. My original plan was to be a student and part time run my business and then I realized that I’m no longer a good student—
02:27
Mariusz:
Come on, you are one of the best.
02:31
Sam:
Alright, so I dropped out and dropped out of Jagiellonian which is like the many people call like the Harvard of Poland and sort of pulled some Mark Zuckerberg stunt about dropping out of a great school. I didn’t even finish the first semester exams which is how bad it was.
 
But I did take Mariusz’s class on economics and it was a macroeconomics class global finance which was really interesting and we are bringing Mariusz on today to talk about the economic history of Poland in the early 20th Century and also through communism.
 
Especially recently today because if you are listening to this podcast chances are you are interested in entrepreneurship or you are an investor and I think for either class that’s listening to this or if you just happen to work for a startup company in Poland it’s I think the more you understand about economics and business cycles, the better you will be in navigating through this.
 
Richard by way of introduction, I know we spoke about this before but you have quite a background we are talking about in economics, you studied it, you work for consultancy so tell us a little bit more about your background Richard and then we’ll get into Mariusz and have a great economic discussion and as I like to jump at Mariusz, the only economics education I have is reading the Economist every week.
04:02
Richard:
The Economist is a great newspaper and I studied Economics because I was fascinated by the subject and I discovered that Economics is a very interesting subject but the work that the Economists do isn’t necessarily that interesting.
 
I was lucky or privileged or smart enough to study at Cambridge University which is in Cambridge UK which has a reputation for being very strong in economics and some of the world’s greatest, the most famous economists such as John Maynard Keynes were from Cambridge or Professor Nicky Calgore.
 
But they were very much seen as the sort of what became the hallmark of what is seen as the sort sense of left of Prussian economics. Keynes was a successful commodity trader and an entrepreneur in his own right.
 
But the people who inherited this tradition felt that the way to develop a market economy and tackle things like the slumps of the business cycle was through government and government spending. I was pretty much a hybrid on the one hand I could see the benefits of having government intervention to spend money during the slump.
 
On the other hand the time I studied during the 1980s where the political consequences of large government sector were very raw because of Margaret Thatcher being elected to go against the tradition of trade unions and state power. She very confrontationally took on the mining unions, busting unions, introduced a much more pro free market policy.
 
I had a hybrid Poland and the countries of Central and Eastern Europe that were perceived by the people who taught me as being rather interesting and alternative ways of doing things whereas of course for the people who lived and worked in Poland, they were very much more aware than the guys in Cambridge, the failures of the state system.
 
Personally I would say that you can not leave it up to the government, the government has a huge role for laying down the rules of the game Milton Friedman to set an environment in which business people can prosper but the number of countries where state led development has been successful is rather small.
 
There are examples like South Korea but there are other countries like Mexico where they’ve tried to do the same thing in a different culture and they ended up with industrial powers with no industry and inroads leading to nowhere. I would say that my economics background is hybrid.
What’s been happening in Europe in the last couple of years in the States enormous money printing without inflation again we’ll be leaving a lot of monetary economists scratching their heads thinking, how the hell did that happen? There is a great Hungarian speculator called George Soros, he talked about the theory of reflexivity.
 
He said that the trouble with economics is that the economic theorists impact the events that they are trying to predict and explain and that any kind of financial market if you go over the theory it helps explain the price of corn, the price of corn will change because of that theory which means that economics is a fundamentally indeterminate science.
07:19
Sam:
Like the black holes method which caused the recent meltdown was a wonderful model until people started using it, so. Well Mariusz I’d like to bring you into the conversation here because after all you are our podcast guest but …
07:37
Mariusz:
Thank you very much, we want to have an audience.
07:42
Sam:
Yeah, exactly because I think if we did too many shows, I think just one word, just Richard and I that was all we dare do. But Mariusz I’m fascinated to get your short economics history of Poland in the 20th Century.
 
I remember one of our offhand conversations in the hallway learning after class was how fascinating the Polish history was in 1919, 123 odd years of not having a state reemerging on the European scene. If you could, I know this is one of unfortunate areas of your research, talk a little bit about Poland’s original economic rebirth back in 1919.
08:30
Mariusz:
Okay, hello everyone. Thanks you finally gave me the chance to talk for myself. Anyway the questions of Poland 18 years ago or 19 years ago after the first war you cannot imagine the situation, all was done. We had no country for more than 123 years, no country at all.
We were not on European maps and one day we started independent country. There was almost nothing except for agriculture and one day we have to face few important issues. First of all was monetary reform and we did it quite fast and after doing it all almost all countries had huge high inflation.
 
And we faced a problem thanks to minister Grabski excellent guy so we had a stable currency then we built industry. So we opened in Poland within only 20 years a center of infrastructure it was so called center of infrastructure which was built from the ground. It was Greenfield Investment done thanks to the public and serious affairs. No foreign direct investment and fight for investor just grant work of cities.
10:04
Richard:
You are forgetting about Baildon. There was a steel mill called Baildon set up by a Scottish—
10:15
Mariusz:
Yeah, of course but still, second thing can you imagine building completely new town, Gdynia we had problem with German’s in Gdansk and then we had to solve the problems or the idea was to build a modern and new city and we have one of the modest and most beautiful harbor town in Baltics which is Gdynia nowadays and it was built within 10 years.
10:48
Richard:
Perhaps as a role of patriotism and nationalism because the Polish state—
10:52
Mariusz:
I thought I used the word patriotism not nationalism.
10:55
Richard:
Okay, maybe nation building.
10:57
Mariusz:
Yeah, but we were tolerant at the time. Of course to some extent we have an example of intolerance about, the steel I would say it was a patriotic action and Poles were so happy. My grandparents used to say that they were so committed to the freedom of our country, they wanted to contribute. That’s the main background and of course if always is a question. If we had more time, maybe the second world would look different way but we were missing about 10 years I think of development.
11:35
Sam:
One of the things you brought up to me is, and by the way in 1919 when Poland had suddenly inherited this new country they had to fight the Soviet Red Army at the gates of Warsaw so it must have been fascinating just financing that army in the middle of building the economy.
11:52
Mariusz:
Yeah, you just had two years of freedom and were from Dominico came it was donation. People were donating. Ask your citizens to donate for army. That’s the question, would they pay if they avoid taxation? No.
12:13
Sam:
I know in the United States everyone hates paying taxes but as Richard and I have discussed—
12:18
Mariusz:
What would you say, would British citizens donate?
12:23
Richard:
I think it’s a question of history, that during the second world war when my parent were children or first world war citizen subscriptions and I think that also this was a time of more lower general taxation.
 
One of the reasons that people don’t like the idea of paying extra dollars they feel the military gets a large amount of money and the government is too big but the reason I use the words nationalism and patriotism, not trying to insult anyone but just saying the Polish nation had been reborn.
 
There was this spirit of national revival which clearly affected everything from building infrastructure to all over the countryside you get what they call the OSP – Ochotnicza Straż Pożarna like the fire stations and the very much the community center but in the countryside the fire station was the place.
 
And you have the feeling that every – even like the post office, the Polish post office is a symbol of nationhood, much more than a country like the UK or I think the United States people don’t feel that patriotic about the USPS.
13:37
Sam:
USPS is the place where army veterans have traditionally gotten jobs so there is a little bit of pride and a little bit of disappointment in the economic fortunes…
13:46
Mariusz:
For me as a Pole, not only just a common company there is something more.
13:50
Richard:
There is something more.
13:52
Mariusz:
The same with rates.
13:54
Richard:
These days the post office and the rail are a byword for inefficiency. Our apology to any person of these people listening but if you are listening please sort out your Q’s your lines but it was the 1920s and obviously there was the great crash of 1929, 1930 and usually it’s good to have prosperity around you and Germany was in bad shape during the 1920s so what was Poland’s economic growth quite fast in the 1920s.
14:23
Mariusz:
In 20s it was, yeah because the base was very low so it was easy to make fast growth from a statistical point of view. It was a huge domestic demand. Everybody missed everything so it was quite easy to sell production and even a huge wave of demand came from the army as well because we started building a modern and well equipped army, so that is why we had this aggregated demand side quite strong at the time.
14:55
Richard:
In 20s it was, yeah because the base was very low so it was easy to make fast growth from a statistical point of view. It was a huge domestic demand. Everybody missed everything so it was quite easy to sell production and even a huge wave of demand came from the army as well because we started building a modern and well equipped army, so that is why we had this aggregated demand side quite strong at the time.
15:23
Mariusz:
They needed just equipment and the skills as well.
15:27
Sam:
Mariusz you talked about Poland obviously for those are not that familiar with Polish history had been reassembled from really the wreckage of WW1 which is three major empires had partitioned Poland.
 
You had the Austrian Hungarian empire, you had the Prussia, German empire and then the Soviet empire. What was it like in that period economically reassembling different railroad standards, different education systems, what were the challenges that Poland faced during that time?
16:05
Mariusz:
Actually we are still all facing the same problems. We are divided, still divided and we’ve still got the remains of these divisions. First of all these are all cultural differences, people from western part of Poland tend to be a little bit different than those from western part.
It’s because the different regulation system from former Russia was introduced to Polish citizenship there. And on the other hand we had this post German style of governance in Wielkopolska which was the western region of Poland which was the region with the highest standards of development goods, roads and railways and so on and so on and good education system as well.
Of course we must remember this was the system which tried to teach on the German and forget Polish language and Polish tradition, so people were punished, they weren’t using Polish language enough in schools. But still here in Poland we see a huge difference on the Vistula River, this kind of an edge of development, we see nowadays a western, well, quite well developed Central European regions.
 
And on the other hand the eastern part, east off the Vistula these are the regions which are undeveloped. By the way the people living there except for low economic standards they feel the most happy living there.
17:42
Richard:
And if you look at the voting patterns, when they publish maps of how people vote you can see the old, it’s almost like Partitioners the Galicia region. They all vote the same way more conservative more progressive free market but this is a separate topic.
 
But you referred also to the German interference of course this wasn’t the interval period was different what happened in 1945 when Poland was shifted westward and this was Stalin’s evil genius realized if he gave some Polish territory to Ukraine and some German territory to Poland it would create tensions on both frontiers.
 
There was even a little joke that if Poland had to give back its German territories the economy would probably collapse and if it regained its eastern territories the economy would certainly collapse.
18:44
Mariusz:
Or both, right, let’s do both.
18:45
Richard:
A little bit unfair on the Belarusians because the Belarusians were actually one of the more sophisticated bits of the soviet economy and the industry in Belarus was quite strong possibly because Stalin realized he needed to invest there, or rather the Soviet leaders after the second World War they needed to do something in this border area to make it look not so bad compared to what was going on for the west.
19:12
Sam:
Mariusz one of the things I think that’s fascinating is there is a lot of press coming out these days about Poland’s resurgence and how the economy has had almost 24 years of uninterrupted growth since the wall fell. But I think what’s fascinating about this lesser studied period is I don’t think anyone really wants to go back to that period.
 
But there is an amazing burst of productivity and growth when Poland was reborn at a time when no one who was living remembered a free Poland and now in 1991 you had a very similar situation where Poland was again entering the western global market economy but people during that period had remembered, there were some people who still remembered what that old period of growth was like.
20:08
Mariusz:
Yeah, in my opinion the second period was even worse. Why? Because people, we used to call them homosovieticos the different people who had the tradition and attitude towards work. They were kind of, if you work or not you’ve got to get your money and go back home, have nice program on TV and that is it, you are not committed to your work.
 
It was one of the biggest obstacle I think about changing mentality. After the first war, we had different attitude because of the patriotic wave and the wave of freedom. We are free, we need to rebuild the country and we’ve got kind of citizens who are so happy that we’ve got Poland again after the first period, the 20 years. After the 1990 we had a bit different situation. We had kind of freedom, let’s say kind of because Poland was on maps but the system spoiled Poland a lot.
21:19
Richard:
Can I ask about the economic impact of the social structure, the long-term tradition of big aristocracy like they weren’t exactly aristocrats in the western sense but there were a few very rich families and a lot of people who had what sold themselves there is upper class without necessarily having that much wealth.
 
I’ve often wondered how entrepreneurial customers have potentially because these Polish aristocrats were excluded from the power structures of their country occupied by Poland. I wondered as in some other countries they were almost driven towards being more enterprising than perhaps they would in a country like the UK where the dream of every aristocrat was to live in the countryside and—
22:02
Sam:
Collect foxes, right?
22:06
Richard:
And trade was seen as kind of inferior and lower class compared to true aristocrats and I wonder whether this interval period of Poland, when the aristocrats and the upper classes were they keen on business, did they engage?
22:23
Mariusz:
In the 20s between the war?
22:24
Richard:
Yes.
22:25
Mariusz:
Yes they were really patriotic and they were really committed to contribute to Poland as a country. They were really committed and I think thanks to them and thanks to their support we grew so fast. Partially of course but they were key and you know a kind of modeled roles for others. They were really patriotic.
22:51
Richard:
Of course in obviously Poland was a pretty unequal society which was probably true for almost everyone this wasn’t unusual, there were very few equal societies back in the pre war years but the pre-second world war years.
 
But on the other hand if you have the people with wealth feeling they need to invest and mobilize their capital, then clearly that can do something for the economy because, suppose every landlord decides he has to repair the roads and the bridge because he wants to do something in his community that creates jobs and starts putting money into circulation.
23:26
Mariusz:
At the time we started building a modern society but who were the most educated people at the time? This was the very aristocrats and they introduced new standards, they introduced new ideas to Poland and mostly it was based on their attitudes.
24:19
Mariusz:
No, it was a part of different free countries and these countries wanted to benefit the most and from the people who lived there so they wanted to tax them, they wanted to use resources and so they did. In other regions for example the Austrian-Hungarian, it wasn’t kingdom it was empire.
 
They were quite, let’s say good for Poles at the time. We have our representatives in the Parliament in Vietnam. We could conduct business on our own, we could use Polish language here, Polish language was taught at schools, so it was not like in German side.
31:56
Sam:
That’s why all the Poles, like Miśkiewicz, well not here, actually didn’t come here but they all congregated here the people who are in the literature and art and that’s why the art museum here is amazing, which wasn’t allowed in the other parts.
25:22
Richard:
Yeah, it’s an interesting comment, the Austrian-Hungarian empire was not so bad it’s very interesting in the simple narrative, empire is bad and democracy and freedom is good. Of course living in this region we know there is a big difference between the kind of empire of the Germans or the Soviets and the empire of the Austrian-Hungarians, seem like paradise.
25:44
Mariusz:
If you want to have a good time you go to pub which is some kind connected to this empire- with name. they serve good beer and they’ve got this Szwejk attitude towards things.
32:34
Richard:
Yeah, the good solder Szwejk I think he’s a Czech-
26:00
Mariusz:
Yes but people here found that this is a good empire somewhere in Vienna and he’s a nice guy so let’s drink for him and-
26:12
Richard:
And this is a very strong leaning to the national character because if anyone is wanting to, is it Jaroslav Hasek is a great book, it’s translated into English it’s about defying authority. It’s about getting away with slight kind of resistance, never going so far you’ll be punished but never really going along. It’s a great read which gives an insight into the Central European form of resistance.
26:34
Mariusz:
Especially here in our Galicjan region.
26:37
Sam:
I’m fascinated as a historian and a bit of an amateur sociologist is the ideas that come out of the different regions in Kraków to me and one of the reasons I was drawn to it when I came to Warsaw originally but then visited here is you feel this much more independent artistic spirit that was allowed to flourish here for so long.
 
It wasn’t destroyed during either one of the wars, artists came here, the schools of literally teaching the best Italian and French artists were here and to this day if you are listening there is a reason why Polish design is so good and specifically why Polish design in Kraków.
That’s why I came here is I was looking for a design talent but also the filmmakers, the composers, everyone talks about well developers and programmers are such a huge asset but to me the greatest untapped asset in Poland is the artists and the 250000 students—

““Everyone talks about how developers in Poland are such a huge asset. However, the greatest untapped asset in Poland is the artists.”

Sam Cook, Entrepreneur
27:42
Mariusz:
Of economics?
27:45
Sam:
The dismal science, well we’ll talk about what I value about economists.
27:51
Mariusz:
And there are some Polish economists.
27:55
Sam:
There is this spirit specifically and I think all over Poland there is and I’m interested in how you think this translates into entrepreneurial activity because 123 years no one living had a memory of Poland.
 
But then this burst of entrepreneurial spirit whether that was bubbling under the surface because capital formation wasn’t allowed among the Polish aristocrats or this patriotic duty to build your country wasn’t just about making your own money but how do we create an economy where we can pay for the army and everything like that.
 
It’s really interesting to just kind of peeling back what you still see today although it obviously changed quite a bit in the Soviet period. Speaking of the Soviet period, obviously we know I think even most people know that Poland was quite devastated during the second world war.
But the realignment of Poland both geographically and economically after World War II, talk about, was it all bad because I’d like to challenge you about what are the good legacies of that and one of the things I was just reading was, and Wojtek from Google he talks about the STEM education of the Soviet system was the strong emphasis of Math, Sciences and all that is the best legacy they left us and that is what people are coming to Poland now for is that strong education…
29:21
Mariusz:
I’m forty plus something and I was educated primary and secondary school during communist system and I was taught mathematics a lot, physics and all these sciences and I think it gave me a very good background and I think the really huge educational asset is mathematics and skill. For sure you’ve employed IT people here and are they skilled?
29:49
Sam:
Oh yeah, they’re the best I’ve found in my travels around the world.
05:05
Mariusz:
Yeah, why here?
29:56
Sam:
Well, what I really like about it is the people think for themselves but they also have great foundations and the basics so there is a mixture of initiative where people don’t wait, they just come up with solutions and there is also very good education, they are logical, methodical thinkers.
30:19
Mariusz:
So if you want to have good schools you need to use to prepare good teachers so if you had good teachers during communist system, you have the base to teach them mathematics logics and so on.
 
That is why maybe we’ve got so strong human assets in IT, business and the second part of this entrepreneurial skills and the motivation they have is I think in my opinion because our income per capita in Poland is usually two, three times lower than out there somewhere in the western countries. Of course you remember the purchasing power anyway people still can commute and they are able to work in the UK, German and so on but they prefer to stay at home. I’d rather stay at home as well. They need to be much better competitors abroad. Maybe that’s the mixture of skills and abilities they really have.
31:33
Sam:
Well, Richard you were here at the end of the communist system and you saw Mariusz just told us the benefits of that system wasn’t all bad for the economy especially the education but what was the wreckage of the end of communism coming in from a western classical economics background?
31:57
Richard:
I wrote my final year dissertation at Cambridge university on why black markets were so pervasive in centrally planned economies and this worked very well in Cambridge because having centrally planned economies and the title meant that it was accepted and writing about black markets meant writing about free markets and I always felt that…
32:16
Sam:
That was exciting.
32:19
Richard:
It was very interesting but I always felt that there was a kind of contradiction which to this day it seems to me that in one way communism and the so-called homo Sovieticus actually taught entrepreneurship because to survive in this communist economy you needed to be more kind of market orientated than a regular guy or a regular marketing company, because you were able to think.
 
So it’s rather like the business system is successful coming out of Poland now are pretty tough, because Poland is a tough country in which to build a business so if you can make it here, you will be competitive elsewhere. There is this kind of doministic effect and also if you go to the big markets in West Africa, you’ll see that entrepreneurship is very strong.
 
I would go as far as to say entrepreneurship is the kind of natural human condition obviously the environment can be more or less favorable. If things are too easy, I think Saudi Arabia or Kuwait maybe that kills entrepreneurship because life is too easy. If it’s too tough, think Eastern Ukraine or Venezuela, you kill it.
 
I’m really curious what you think Mariusz about this idea that maybe the communist period kind of built a kind of pressure cooker, there were all these people who wanted to do something in their lives, the motivation was there but the environment was wrong so it was almost like a local log jam pressure building up but once the market economy started that was like at last we can start, right?

 

“In one way, communism taught entrepreneurship because to survive in this communist economy, you needed to be more market-oriented.”
 

Richard Lucas, Entrepreneur
34:08
Mariusz:
To some extent I agree, to some not.
34:12
Richard:
You can tell Mariusz is as an academic.
34:13
Sam:
On the one hand, on the other hand …
34:17
Mariusz:
On the one hand, sure people who knew they needed certain things the system did not allow them to get so they had to make things done. Something about trying the best, sometimes not legally, they were entrepreneurs so in that sense you are right. But I think the wave of entrepreneurship in the early 90s was caused because we were missing a lot.
 
And I think that our neighborhood with Germany was also influential because we could see what are the standards of living there and we are comparing ourselves to that so we wanted German style furniture, we wanted German style cars and so on and so on so people wanted and needed to work more entrepreneurial way in order to earn more than regular wage at office or at school, so maybe the mixture on the other hand.
35:20
Richard:
Yeah.

 

35:21
Sam:
I also want to emphasize this is not a foregone conclusion, Polish success, and actually a great economist article recently pointed out that Poland and Ukraine, both the exact same populations coming out of communism and the exact same size economy have gone on two completely different paths and obviously there is geopolitical reasons for some of that.
 
But Ukraine in 2014, the conflict with Russia broke out but that’s after 23 plus years of absolute failure to reform and introduce market economy versus Poland which compared to any other country that was behind the iron curtain has done a much better job was the only economy not to not contract during the great recession and is really a model right now in the EU for growth.
What went right that perhaps wasn’t just foreordained by this pent up energy, is it the experience from the inner warriors and the memory of that or is it the geographic factors of the government or what would you identify as the key reasons that things have gone so well at least up to this point in Poland?
 
You’re a professor, you ask me all kinds of questions I don’t have the answer to, so this is my revenge.
36:41
Mariusz:
Thank you very much, actually I didn’t know exactly what to say in short but what went right, the first thing was the Balcerowicz action in early 90s.
37:06
Richard:
Balcerowicz was the first finance minister of Poland.
37:09
Mariusz:
He was taught in States thanks to full bright scholarship he received there and he imposed in Poland very hard reforms especially connected with price regulation. Most of the prices in Poland were not regulated at the time so people had to learn a very first lesson.

 

37:32
Sam:
So the shock therapy that failed in Russia took off in Poland.
37:36
Richard:
Strong devaluation in Polish currency devalued massively so that a regular working salary converting to dollars was like $50 or $70 or $100 a month which of course meant that the only way was up, and once people understood that they believed that they could be paid less. You didn’t mention the role of the government and people in Poland complain about the government a lot.
38:02
Sam:
They just had their election.
38:03
Richard:
I think if you go to Ukraine or Russia then you can see that actually partly because the Polish political traditions still was patriotic even with these not very smart government officials, they cared about the country on some level, they also care about themselves but also the European Union gave a kind of destination of good regulation than the Irish and British people would realize … in that style of regulation …
38:32
Sam:
All the immigrants from Poland are not bad either there so –
38:36
Richard:
So there is relatively good governance, they were … maybe working … but you can no sense that if you criticize the government or you criticize big business you might get beaten up or arrested or worse which … in the Ukraine, threatening the big oil … there is a dangerous activity. People talk about the … in Poland and there are some very rich former communist business people but you don’t have a sense they are terrorizing people who control the economy right?
39:07
Mariusz:
Yeah, we are completely different than the situation in Russia or the Ukraine completely. We cannot be compared …
39:14
Richard:
That’s what Sam …
39:17
Sam:
Tell me why, I don’t want to know …
39:20
Mariusz:
Tell me why, because we do not shoot people at streets here if they’ve got opposite opinions on some issues. We are a democratic country first of all. We’ve got the freedom of voice, we’ve got the freedom of choosing our style of life. Hopefully it will last but on the other hand take a look at our neighbors on our eastern side are able to speak freely what you want or you will be imprisoned or you will go behind bars or to … for ten years of work? No. No such thing in Poland. We have complaints of course but everywhere in the world people are complaining about government, it’s corrupted, it’s stupid and so on and so on.
40:07
Richard:
And it’s never going to be perfect of course, yeah.
40:12
Mariusz:
People are complaining but they are hard workers …
40:17
Richard:
And they’re allowed to complain.
40:19
Sam:
And they’re really good at it. We talked about that Polish optimism, you complain and then you do it.
40:26
Mariusz:
Yeah, once you mentioned that you were complaining in a week time doing things others cannot do for a month so maybe that’s the … question. On the other hand, why not the same standard attitude at the Ukraine? I think the solidarity movement that also matters a lot. It also matters a lot. The movement of people who wanted to be free, it was a social movement but people who wanted to have the voice and of the influence of home country. I think that because of the solidarity foundation we are a stronger society than in Ukraine or in Russia republic.
41:20
Richard:
I’m not happy – Sam is having trouble with his phone, his laptop is ringing like a phone. If you switch your WI-FI off and that will stop ringing for you, …but also in your experience as an economist so you have these two perspectives but sometimes I think the role of luck in history is underplayed.
 
There was a time when East Germany was about to re…with West Germany where things could have easily gone the way they went in the Chinese town…you’ve got soldiers…in Poland there was this time when marital rule was declared when there might have been a Soviet invasion and the Balcerowicz plan was good with that.
 
Because it was an individual or many people who wanted a different economic path and do you think that you can put down some of Poland’s economic development to good fortune or the right person made the right choices at the right time and had it not been professor … but some kind of liberal gentle guy who thought we should go slowly in Poland we might not be where we are today or do you see this as an inevitable process of Poland to prosper?
42:37
Mariusz:
I always stated I really love lucky people.
42:41
Sam:
Find them.
42:44
Mariusz:
I really love them, I do love them. I hope my wife is lucky, I hope my kids are lucky, I hope Poland is lucky. If we work hard as we work because the average work more than other nations in Europe, if we have good luck, we will be for sure more successful.
43:08
Richard:
Poland has recently voted in most recent presidential elections, the majority of Poles voted for a president who is in favor of cutting the retirement age. Poland already has a lot of – has a very low average retirement age so maybe things aren’t as lucky as- some people say Poland is a lucky country. Now, historically this is…
43:35
Richard:
Oh wow they think they…
43:39
Sam:
It’s … the next Kazimierz speakers make this point, … because make the point that Poland has and never had such good relations with its and neighbors as now yet there are many Polish people who are dissatisfied who feel that the entire pitching … it can’t be like this, the wages are too low, the country is in the hands of the corrupt elite.
 
What would you say to people who are more negative about the current situation and the current trend in Polish politics? They reflect a big group of people who feel marginalized, excluded by the current situation.
44:15
Mariusz:
Sam ask me what went right and quite a few things went wrong during the 25 years … especially for those who were not educated who lived in rural areas in special kinds of agricultural compounds let’s say and there are more than 2.5 million people in such situations.
These are not citizens of huge towns like Warsaw, Kraków, … or so and these people are victims of reforms. The poverty is going deeper and deeper in the regions so these people have the same voice as those who are lucky.
 
They were born in big cities, they were educated so we had of course the huge migration wave after our accession to EU about 2 million young Poles who were educated moved to United Kingdom, Great Britain, to Germany to France and so on and we missed this important resource.
 
Their families are unhappy, some people are unhappy as well but in a democratic system you must be aware that after eight years or ten years of rules of one party, one day the second one, even if its worse or not but it has higher chances to win than the one that ruled for ten years.
45:54
Richard:
And they get to correct some of the excesses that’s been in power and has been unable to impose its will for a time.
46:02
Mariusz:
In my opinion, they lost. This is a political question … I … at the University.
46:08
Richard:
Right, … the recent presidents …
46:16
Mariusz:
Anyway I think that the strongest person in the policy which ruled upon … was Donald Tusk. When he moved to Brussels, the power of the party was … yeah, they lost the leader.
46:39
Sam:
Right, … talking about politics now. I think for many of our listeners, economics and business and technology is important and I know that entrepreneurship is part of what you study.
What do you feel is the strength of the Polish technological base and other people listening to this have the haziest idea of where Kraków is, they … somewhere in Central Europe but then they hear us talking about our strong programming and our good design but if you look at it from an economics point of view, what are the main assets we’ve got here other than the ones we’ve mentioned and in terms of technology and entrepreneurship maybe what are some of our weaknesses?
47:28
Mariusz:
First of all the strong differences we have are humans. That’s the strongest asset that we’ve got good higher education, competitive, it’s still cheap, we do not pay for … in Poland, so thousands of young talent people can educate for free. It’s really important. In the States how much do you pay for what is the tuition?
47:58
Sam:
Oh, that’s the biggest in my opinion economic bubble time bomb waiting to hit in western…
48:07
Richard:
It can be quite …
48:08
Sam:
Even those the rate of increase in US States schools because they are trying to keep up with the private and it’s way up pace in inflation.
48:18
Mariusz:
We’ve got this privilege to study for free and that’s really important.
48:24
Sam:
And everyone is educated in English.
48:26
Mariusz:
Everyone speaks English, better or the best but they can communicate, they can work in English, so it is an open society. These young people at age of twenty something, they can travel, they can commute, they’ve got friends abroad so they are not scared of going into foreign affairs I would say in a foreign business in such company like yours or Richard – business as well, these are Poles who are not afraid of working in such a … so this is also important.
49:06
Richard:
So the human capital, the people …
49:09
Mariusz:
Yeah, what we are missing really because I’m thinking about creating another Silicon Valley here, we’ve got people, we’ve got motivation and some government actions in my opinion not strong enough because the government puts too much emphasis on promoting entrepreneurship and to make it really easier. You hated things … coming to you and you had to sign the paper…

“In creating another Silicon Valley, we’ve got people, motivation, and government actions that promote entrepreneurship and make it easier.”

Mariusz Trojak, Professor of Jagiellonian University
49:45
Sam:
Yeah, Mariusz I just brought on as a part-time CFO and I think he pointed out to me how many rules I’ve broken in Poland … I’m in full compliance now so –
0:01:15 Mariusz: Come on…
50:01
Richard:
My experience as a business person here is I got very frustrated with bureaucracy in Poland. If you talked to a British businessman or a Belgian businessman or an American businesswoman, they also have a lot of regulation, it’s like regulation …
00:14
Mariusz:
But they are rich enough to have them.
50:17
Richard:
Well, I would say that that takes safety standards … safety standards, sometimes things don’t come for free and I’ve recently been looking and exporting into Swiss market and I am just stunned by Swiss regulation. I think it depends on the culture. Regulation can lead to corruption and slowing down but in the right culture like in Japan or on Switzerland the regulation pushes off standards so people have to invest to keep up with the latest standards and so having … Polish bureaucracy just saying we are not the only country in the world where a businessman has to deal with it, and people do deal with it. It’s not like you have to pay a bribe to get to it, it’s just like you have to fill in these bloody forms.
51:03
Sam:
They actually care if you don’t do it. You have to fill all the forms well we never care …
51:07
Mariusz:
Let’s call it cultural differences.
51:11
Richard:
On the one hand we’ve got the strength of the human capital and like the ambition of the human capital.
51:17
Sam:
The spirit.
51:18
Richard:
This individual group nationwide ambition is again it’s not everywhere but it’s enough, right, not everyone needs …
51:26
Mariusz:
What we are missing is the … support from financial sector I think because …
51:30
Richard:
Financial crumble.
51:32
Richard:
Financial crumble as well but also good corporation with banks because I think that banks are so risk averse and they are not supporting let’s say risky business on the one hand it’s okay because of the regulatory standards banking but on the other hand, the tradition of venture capital in Poland is not strong.
 
That is why people are seeking for capital and for financial support at banks and that is how I think that the government should put some attention towards specific guarantee system which will be open to entrepreneurs in order to get along the credit which will be better … by the government guarantee fund.
52:22
Sam:
I think other the points that we’ve made in past episodes we’ve studied this is we are in the maybe beginning second generation of capital formation where the ones who’ve made it like … and some of the other people who have really made it in the very first wave of capitalism in Poland are now putting back.
 
But there are not enough people like Pyok doing it and one of the things I love that he’s doing with is he’s networking with and trying to bring in that money that loves risky ventures from the United States and trying to build that bridge. How else, so you think the government needs to play a bigger role in …
53:06
Mariusz:
There was an example that I did some work with the local regional authority which is quite good and I suggested for their entrepreneurship website they should have a section called financial institutions which lists the contact person for all the banks …
53:21
Sam
Put your name on there Richard …
53:24
Richard:
Individual angel investors are not going to be for everyone, they lists the point of contact for small and medium sized enterprises and the idea that would be … to embarrass the banks but if they have … responsible then they will just see a blank space and there is a … politicians to.
For example the mayor of Kraków can just invite the banks in that are doing a good job because people are people and even if it’s a burning passion of a banker. I was just googling now that in Cambridge UK where I studied, the Cambridge phenomenon, Barclays bank had a particular bank manager, I was trying to google him, I think he was called Mathew – I’m not sure who.
There was one particular bank manager who said that I will lend to technology companies … in Cambridge and I ask for billion pounds that’s more than a billion dollar companies and these only of these alumni of these first companies like CSR or autonomy or … computers and so I didn’t get into financial institutions thinking about supporting enterprise rather than just advertising consumer credit.
 
I believe in freedom. On the other hand Japan censored adverts for consumer goods and directed all savings into national investment. You can go too far but clearly it’s way better, way better for the economy if a bank lends 25,000 Euros to someone to invest in a business than 25000 Euros to buy a car.
 
There are some loan guarantee schemes that I think that …
54:59
Mariusz:
They are remitted and to some extent they are remitted for the period of time the company exists in the market and so on and so forth so there are some bureaucratic barriers and banks are not interested in renting such credits or loans which cause problems it does not produce enough returns on the credit. We need much stronger support I think in that area.
55:25
Richard:
One of the advantages that Poland does have, while there is not this huge venture capital, there is a river of EU money that’s coming to Poland as a raise or reward for their economic performance and it’s good investment for the EU which is paying off but also that’s still going between now 2014 and 2020, the next I think 120 million Euros is coming in …
55:52
Mariusz:
Yeah, of course it’s a lot of money but the money has to be distributed in the right way.
55:57
Richard:
Ronald Reagan famously said the most terrifying sentence in the English language is I’m from the government and I’m here to help. And I personally and many, many people in the entrepreneurship ecosystem agree with this thing that sometimes this EU money has been positively damaging because you could get up to 200000 Euros.
 
That’s a lot of money and like in the US, you are very … everywhere they’re like … for the average guy that’s a lot of money but the rule was, you can get the money if you came up with a business plan which included how you are going to spend it. If you think of yourself as more entrepreneurial who gets $200000 or Euros or Pounds from an inheritance.
 
The worst you do is go out and spend it but in this EU, you had to execute your plan. So they would buy computers, they would buy office furniture, they would buy cars according to … and sometimes they would even make a kind of rule so they would invoice each other to try and … their money.
 
Someone goes on the cars and on the furniture which is I think … and it’s a kind of waste, so you have an army of consultants teaching people how to fit in a new grant application so you can take the macroeconomic view that well at least the money somehow reaches the economy but it’s also not very fair.
13:37
Sam:
USPS is the place where army veterans have traditionally gotten jobs so there is a little bit of pride and a little bit of disappointment in the economic fortunes…
57:22
Mariusz:
We work out … about the building infrastructure like motorways like things like that. It does not produce wealth to the country if there is no system of bringing business to such places. What’s the use of new motorway if you have nowhere to go? What can you do in the middle of nowhere even though you’ve got the best motorway in Europe? They are senseless.
57:59
Richard:
Having said that, there is some religious, from the point of view of ordinary citizen as obviously in this … podcast and hopefully you are providing some insight and analysis opinions on what’s going on.
 
From my point of view, if I see the European Union has spent a billion Euros helping Poland clean up its water or build a network of some motorways at least there is something in the end. If it goes on this crazy EU funded consultants who produce … that no one reads, that only produces money for the consultants, so there is some kind of …
58:36
Mariusz:
Paper produce I’m so happy because of that …
58:38
Richard:
When … as a subway in Warsaw, not a very big one but there is some subway in Warsaw, it was built, the mayor of Warsaw said that when they filled in the forms to send to Brussels they had a truck and 132 ton truck was loaded up, two trucks of … from most of the Brussels…
58:59
Sam:
Well Mariusz we thought of – and we were talking about this with the guys here in … who run funding and I think one of the ideas is you were thinking about which I thought was great is the government gives guaranteed loan with the EU funding which I think when the bank is supervising a loan which they stand to profit from they are good stewards of the money.
But I think one of the great ideas I heard you talk about was, well why does the bank back a venture fund and guarantee part of their investment to get people who are really keen on getting their return on investment and making sure money is not wasted and spent and I don’t know why the EU it’s probably … to think about that but that was a great idea I heard you talk about that.
58:49
Mariusz:
Yeah, people usually are lazy they’ve got a lot of work to do, a lot of stamps to be put on paper and they have to report to their bosses and so on and so on. So if you give …
01:00:02
Sam:
And those bankers are as relentless you’ve got to keep them …
01:00:06
Mariusz:
So if they’ve got the wages, if they’ve got enough returns and Polish banking system generates enormous amount of money for the owners. You’ve really … for … of banks. It generates a lot, really a lot. We’ve got stable and very profitable banking system.
 
Return on equity in Poland eats about 30% in … in banking. Would you take a risk to do with loans with entrepreneurs and stuff if you are so profitable? Rather not. That is why the government needs to give some push moves towards them. You are more regulated in banking sector, you want to be able to promote loans, consumption loans on TV or something, just go to this sector of economy.
01:01:01
Sam:
So really the government prescribing to banks that you will do business loans versus consumer loans with your EU that funding.
)01:01:11
Richard:
This is not the only environment in which – these kinds of views are quite common. There is an initiative called startup Poland this kind of … promoting startups and one of the things that are … for is special tax breaks for investments in startups and I have to say that in the UK where I am from.
 
On one level I feel quite unlucky as I’m not a UK taxpayer I can’t take advantage of these tax breaks that people invest in startups but my underlying feeling as a Hungarian economist … said that you shouldn’t have special breaks for foreigners, you should have a good system for everyone.
 
The key is to make it a good business environment for everyone and like special tax breaks. Of course it’s easier for bankers to lend money for consumer credit for cars. I’m sure there is a role for the government to shift it back but this is not a Polish specific thing. Everywhere, the UK has this discussion, America has this discussion …
00:02:16
Sam:
American banks don’t lend a business. It’s a … environment.
01:02:19
Richard:
The common … is that the bank will lend you money when you don’t need it.
01:02:25
Richard:
When you are rich enough, forget the bank. So we talked about the financial sector, we talked about the government, we talked about the education system, you made your controversial … saying we don’t need better infrastructure which …
01:02:39
Mariusz:
No, understand me well, I’m saying that we need good infrastructure but it must go hand in hand with other like developing human capital like developing entrepreneurial environment and so on.
01:02:54
Richard:
In your education program where you teach, you are teaching a foreign program but you also teach Polish students. Can you compare the foreign students, let’s say like …
01:03:05
Sam:
Very well, good evening everyone.
00:56
Sam:
Yeah, who was the worst student …
01:03:01
Richard:
The values, the attitudes and the level of motivation of your Polish students and your international students because I find that Polish students are quite confusing. My children have gone through it, one of them has just left.
 
On the one hand there is a lot to criticize, really no one will say Polish schools are great in every way. On the other hand the outcome seems to not be too bad and you must experience this every year with more students coming under your care as a university lecturer. What do you think of Polish students compared to France students?
01:03:46
Sam:
Not an easy question.
01:03:50
Mariusz:
It is the hardest questions, you give me today. I would say the difference between them in time is diminishing. It’s diminishing. Polish students are becoming international and foreign students coming here to Poland learn a lot about our country. It’s not a country like somewhere in the middle of nowhere on the map. It is just a common country. In my opinion we’ve got not substantial difference between students attitudes to classes to learning like others of course we’ve got some specific features for example German students are from one page to another which paper should we read for tomorrow’s class or something like that …
01:04:47
Richard:
They actually do the homework.
01:04:50
Mariusz:
It’s kind of stereotype. Poles are similar to French, Italian and Spanish students. You shouldn’t learning too much but when the examination sessions come, most of them are really doing hard work and they are preparing…
01:05:09
Richard:
I think Polish students’ parents are different because I am … so I can see the difference between a 50 year old Pole and what his life is like in my life I grew up in a different, I’m just old enough to know the locals who remember the communist times and so the young Poles, maybe their parents are 35 or 40, they really don’t have a … memory of the communists.
I think one of the key differences for many adult young Poles is that they grew up with their parents telling them that unless you work really hard you are going to have a really shitty life whereas in Western Europe it was more like, you’ll probably have quite a nice life unless your … is kind of … you are looking like you totally disagree with me which is good.
 
But I’m saying that just to finish this comment I would say that Polish young people are … yeah a different thing from their parents and their grandparents than their European equivalents. If they are interested in history they are… different history in France, Germany, Spain and the UK.
01:06:21
Mariusz:
Yeah, but people at the age of 40, 50, those parents obviously… here now I know them because I’m almost at the same age.
01:06:30
Richar:
You’re a big younger right?
01:06:34
Mariusz:
A bit but these people tell to their kids, take the chance, you’ve got the chances we never had.
01:06:40
Richard:
Yes exactly.
01:06:40
Mariusz:
Take the chance, you’ve got the chances we never had. Go abroad, say something, learn languages, be smart, develop the characteristics they couldn’t use when they were at the communist time. That is why I a little disagree, not totally disagree with you.
01:06:58
Richard:
No I think actually,.
01:07:07
Sam:
Talk about it from a different angle.
01:07:04
Richar:
Basically certainly the western European tradition and atmosphere and a lot of countries as well are … but there was like the golden age, the stable job, a good high salary, now there is globalization and there is more competition, more …
01:07:23
Sam:
Polish workers have taken all of our jobs.
01:07:25
Richard:
Exactly, but it’s like if you are privileged or educated British guy like me or the kind of guys I studied with then probably you don’t have a problem with this mass immigration. I remember taking a taxi in Bristol which is a major town in west of England and the taxi driver told me he used to be a brick layer and he could make 150 pounds a day.
 
Now he can make 80 pounds a day because of the immigration not just from Poland but from all of Central Europe and for … okay, it’s not a bad life earning 150 pounds a day in the UK but that’s heavy work, that’s hard work. Construction type work is tough, you should be well paid and so for him the immigration was a real threat to his ….
01:08:14
Mariusz:
Simple question, simple answer. He’s not thinking why there are so huge differences.
01:08:19
Sam:
And Mariusz you know you talked about this and we are talking about all the Poles who are in the UK and I know that you have family in the UK and I also know quite a few Poles in New York where I used to live and obviously Chicago I think has more Poles than Warsaw does.
So you have this huge, and it’s interesting also I think they did a study in America how the entrepreneurial gene or the social mindset that goes with that is stronger in the United States, why because probably the fear is if you get on a ship and go across the United States you have something different in you, kind of like someone in the UK who comes to Poland for some … an hour from the United States who comes to Poland, like something not quite the same.
01:09:07
Mariusz:
It’s a…
01:09:08
Sam:
What I’m wondering is, when are those, because I actually know one of these Poles, Alex a good friend of mine who actually took me to the first Google for Entrepreneurs meeting, his father and mother are Polish and they moved in the 80s as young children and … he’s older and he’s coming back.
 
He’s fascinated by Poland and wants to find a way to stay here and … living here and college educated, went to Jagiellonian with me and actually graduated. I think a lot of those – I have a sense that a lot of those people who, the middle class dream in America I think that was probably just a myth the whole time.
 
But the sense of that escaping them I see, I think there is a chance for Poland to bring a lot of those people back or not necessarily the people who have moved but their kids are going to be very interested in coming over here and maybe some of that capital.
01:10:01
Mariusz:
Of course I definitely agree with you because we are in different moment in time. 20 years past and we improved so much. The parents of your friends remember the past Poland and your friend came and he saw different country it’s a different country.
When I’m in Great Britain, sometimes I went to … and I see not too optimistic view on Poland sometimes. They tell us some rumors, the stereotypes and so on and the best idea is to just come and see. It takes one hour and 20 minutes flight from Heathrow here and just take some stuff and come here and see and watch what’s the situation like, …
 
I would tell you one story in 1972 Polish national football team was playing against England in Wembley stadium and the English fans were shouting “Animals!” “Animals!” on Polish teams. We are not animals.
1:11:25
Richard:
Yeah, I don’t justify what some of my compatriots …
01:11:28
Sam:
They just …
01:11:34
Richard:
Saying too, I think the reality is that every society in the world has its unpleasant undercurrents of intolerance and hostility and I was just going to make this comment recently in the Economist magazine there was an article.
 
In fact I just looked it up it was on the 8th of November talking about social mobility of the younger generation now is facing … with social mobility and this is unprecedented or it used to be. People expect their children to be richer than they are and it’s certainly true in America and it’s probably true in the UK.
 
But increasingly the parents and the grandparents have got a lot on the property market, they’ve got a lot on the pension system and on the tax system. Whereas people like me, my property is going up with the growing economy, it’s out of reach for a young person leaving university. They can’t afford a property.
 
The tax system in the UK people paid for education. I got if for free, now the … generation is starting to pay. The challenge now, actually this isn’t a Polish phenomenon, this is an American phenomenon. The world of safe jobs is over for everyone everywhere.
 
You have to be more aware of what to do to make a living. There are people listening to this who make their money out of apps for iPhones and for android phones ten years ago, these industries did not exist.
 
But there are people who live off now because they are quick and if you are just expecting to live by doing whatever your parents did then I’m afraid you may be one of the people who’ve down social mobility will be a reality. You have to pay attention but if you are listening to this podcast, that’s probably a sign that you are in the group that will survive and prosper.

“The world of safe jobs is over for everyone. It’s not a Polish or American issue. You have to be more aware of what to do to make a living.”

Richard Lucas, Entrepreneur
01:13:26
Sam:
You are in a self selecting group really—
01:13:29
Richard:
I just want to mention something. Two years ago I had to be at a Polish station in London for some family reasons there and a guide, a policeman asked me where I’m from, I am Pole, Polish citizen, oh okay and he started talking few words in Polish, I already bought property near … and all the police officers from London are welcome.
01:13:56
Richard:
Wow.
01:13:59
Mariusz:
He gave me a lot of support.
01:14:08
Richard:
But interesting though I think particularly in the Central left, what happened in Central Europe in Poland, not only in Poland, there was a huge challenge to people who want to be critical of the way the western world was critical of America, critical of Western Europe.
 
And as President Kennedy said in his famous Berlin speech, he said, you can criticize a lot of things about America and the western world and you’d be right, we have plenty of problems but we never have to build a wall to hold our people in.”
 
There was this image that somehow I call it relativism, yes, there are problems in Eastern Europe but there are problems in Western Europe, this is a communist … and in fact the end of the iron curtain proved was that the western systems were basically superior.
They worked better, they were richer, they were freer and so in organizations like the BBC which were not living off the market, living off the tax … tax issue. There is a big chunk of people that the phenomenon of successful working class entrepreneurial Poles showing up in the UK is a huge challenge… and so there is a kind of anti Polish, anti immigration thing, not from right wing nationalists but from sensationalists nationalists I… say national socialists…
01:15:34
Sam:
You felt there is a …
01:15:36
Richard:
I think there is a story to be told of things … the Kraków … the Euro 2012 football championships in Poland and Ukraine, the BBC produced a program , a lot of stadiums with paint which was condemned by black Polish mps, by Polish Jewish … as being completely wrong in portraying Poland as being anti-Semitic and they even …
Kazimierz because Jonathan Ornstein the leader of the Jewish Community center was saying, yes there are problems … way better than of all things, they cut out sentences things are way better … and they totally flipped it around, and to my knowledge Chris Rodgers, and Tom Charles, who produced and presented a program, … disciplined, there was an internal inquiry but I don’t think anyone was fired and possibly they should be.
01:16:34
Sam:
Well Mariusz, I’ve really enjoyed, it almost feels like class again, I get to torment you from the back of the room and try to keep your class interesting even though I probably didn’t do my homework but I just wanted to thank you for coming on today’s podcast.
I think for anyone who doesn’t have a PhD in background in Polish economics this is going to be very educational. If you are not from Poland or do not know anything at all, also great value for the listener to just hear a story about an economy that if we think we had it tough in the founding days of the United States and great men like Carlton or Hamilton who I shudder to think what our economy would have been like with – like that.
Well some of the things happened in Poland, great leaders emerged and I think created a lucky situation and you need a lot of things to clear your way to be lucky but you also need to stand in there and put the foundations down and it takes a lot of work to be happy.
01:17:51
Mariusz:
IYeah, it really sounds patriotic but I’m really happy I’m Pole and I’m really happy I’m here at this time so, join me.
01:17:59
Sam:
And that’s a Pole apologizing. An American would never apologize for saying they are proud to be American but I love the distinction and the humility and the knowledge that this has been a great time in history despite being dealt one of the most unlucky hands geographically and geopolitically. Poland has really made something here in Central Europe and it’s going to take a lot of hard work and luck going forward to keep that.
01:18:34
Mariusz:
Let’s hope this struggle will not be spoilt because of some political disturbance and it will be on track.
01:18:43
Richard:
Yes indeed. We started talking about patriotism and I think one of the – things in Poland is that people do care about the country but it’s not like a zero sum game. If Poland prospers, it’s good for the rest of Europe and if the rest of Europe prospers it’s good for Poland and what’s great now is the increasing self confidence that it used to be a kind of desperate patriotism.
People thought that the national anthem of Poland, you have to … it’s like Poland is not yet lost … like this is the tradition people grew up with and thanks to many different people and thanks to the dynamic environment we’ve got here now, it’s increasingly realistic to say yes this is going to be a relatively fast growing part or a relatively successful part of the world and we need to work out, we need to pay our taxes, we need to build new products and services and we need peace, freedom and democracy.
01:19:50
Sam:
Yeah that’s right and know that the price paid to get here was quite steep and that appreciation for it is real and I think it’s important to keep that alive as we go forward because people tend to forget.
01:20:03
Mariusz:
Thank you.
01:20:04
Sam:
Well thank you Mariusz and thank you finally our Project Kazimierz listener for enduring Richard and I’s attempt to understand Polish economic history with one of the foremost scholars on it here.
01:20:19
Richard:
Well, I like to double and pretend but thanks again and this has been an incredibly educational – and we hope that it was also for you and thank you for taking the time to invest in your own education and knowledge of the opportunities that exist here in Poland and in Central Europe.
01:20:22
Sam:
Well, I like to double and pretend but thanks again and this has been an incredibly educational – and we hope that it was also for you and thank you for taking the time to invest in your own education and knowledge of the opportunities that exist here in Poland and in Central Europe.
01:20:42
Richard
Also please give us feedback because this is the first academic we’ve had who is kind of academic and we like to have intelligent people on the show. We want to know what you want to listen to, so if you loved it, leave a comment on iTunes on our page. If you dislike it just send us an email.
01:21:00
Sam:
Yeah, if you dislike it send us an email—
01:21:06
Richard:
But seriously, we are interested in feedback if you let us know what type of people you want us to talk to, our general focus is on business, economics, entrepreneurship and technology but equally we are capable of putting other people in front of the microphone if that’s what you listen to.
01:21:22
Sam:
Well and as Richard and I have already done interviewing other guests that there is more to life than just a business and I think the rich culture and heritage and the fruits of this prosperity and labor here are just as important so we are open to any suggestions. Thanks again and Project Kazimierz listener, you’ve just heard another episode of the Innovation in Europe podcast and we’ll see you next time.

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