A Breach in the System: The "Polonia Firms" 1976-1994

The economic history of late-socialist Poland is commonly described in terms of stagnation and accelerating decline. Pressured by an increasingly insurgent population, Warsaw favoured opening up the domestic market to Western capital over unpopular price increases, but ended up as the sick man of Europe, burdened by rising foreign indebtedness and unsustainable consumption. At the same time, however, this policy shift offered unprecedented opportunit ies for those willing and able to engage in the expanding private sector and its growing entanglement with the West. The project investigates the subsequent emergence of a new cast of socialist entrepreneurs through the lens of the so-called Polonia firms, a novel kind of foreign-owned companies particularly in the light industry and service sectors that operated as islands of capitalism within the Peoples Republics planned economy system. Between 1976 and 1989, their number rose to nearly 2,000, employing an estimated 80,000 Polish citizens. Our project addresses two major gaps in the historiography of state socialism and the Cold War. Firstly, the focus on the Polonia firms sheds new light on the role of diaspora actors in late- socialist processes of economic globalization and marketization, as the legalization of companies with foreign capital participation explicitly targeted the Polonia, the community of Poles and foreign citizens with Polish roots abroad. Their involvement into the Polish economy was supposed to foster economic and technological knowhow transfers, but also to counteract the political antagonization of homeland-diaspora relations that followed in the wake of the emergence of a mass-based opposition movement in 1976. Secondly, we explore the field of transnational production and distribution of goods and services with particular regard to small and medium-sized enterprises, which is still largely absent from historiographical debates about East-West entanglements in Cold War Europe. In five interrelated subprojects, we investigate how the Polonia firms interacted with the planning bureaucracy and influenced consumer behaviour, social norms and managerial training practices, but also explore their afterlife in Polish collective memory. Our overarching aim is to bring society back in to understand the origins of marketization and mass recruitment into private entrepreneurship in late-socialist Poland, focusing on the socialist entrepreneur as a collective actor and co-creator of a new economic order. The project thus contributes not only to the current debate about socialist globalization processes that predated the Washington Consensus. It also adds to the discourse about the long transformation from plan to market, framing the post-socialist transformation as the radical continuation of already ongoing developments and thereby efficiently deconstructing the transitology paradigm as an intrinsically Western concept and, in essence, a relic of Cold War thinking.