Lindsay's Lessons

The 1980s in Poland, as it was for many of the Communist regimes was the slow march to inevitable change. The world in the 1980s was in the midst of substantial changes. Globalization was expanding rapidly and would only keep expanding as the decade went on (Legrain, 2002). Communist leaders wanted to cling to power because it meant they and their ilk had the power and control. All this system did was create another elite – the Communist party and those in their inner circle (Djilas, 1957). This was no different than the capitalism these leaders rallied against (Djilas, 1957). First, you had to be a party member in Poland to get and keep a decent job (Janos, 2000). Second, the inner circle of the Communist party were the haves. They had the better living spaces, access to groceries and other consumer goods that “regular folks” did not (Janos, 2000). Those who were disloyal or dared to speak out against party rule were ex-communicated from the cult. The hypocrisy of the ruling party was one of the many reasons this house of cards eventually collapsed.

Two of the strongest gusts pushing against this house of cards arrived with the election of two key leaders: Ronald Reagan in the U.S. and Margaret Thatcher in the United Kingdom. Both leaders were about as far away from the socialist left as you could get. With their election a new age of neoliberalism and capitalism began. The Cold War’s continuation since the end of WWII had provided ample rhetoric for both sides and Reagan was about to amp it up.  Ronald Reagan’s disdain for Communist ideology ran deep, tracing back to 1947 when he testified before Congress regarding potential Communist influence within the Screen Actors Guild, where he served as president (Danver, 2019). To no one’s surprise, once he took the office of U.S. president in 1981, the “evil empire” of the Soviet Union was directly in his sights.

Poland fell under the influence of the Soviet Union after WWII and, along with the other states in the Soviet Bloc, had implemented a command/Marxist economy. The Communists wanted to avoid the exploitation of labour via the “capitalist mode of production” and believed their system would provide more equality among the population ( Exploring Economics, n.d.). Marxists wanted a revolution (which occurred in the Soviet Union in 1917) to free the working class from their upper-class masters (Basu, 2012). In practice, this movement simply created a new ruling elite—those in the upper echelons of the Communist Party. The rest of the “Western” world adopted various forms of Keynesian economics with liberal twists after WWII, most notably the U.S. which emerged as an economic power and international hegemon. By the time Reagan had entered office, the U.S. was well positioned to put pressure on the Soviet Bloc by supporting any cause that undermined the Soviet ideology, which included Poland’s Solidarity movement.

Following a severe global recession in the early 1980s and fueled by interest rates that reached astronomical heights by modern standards, economic policy in the U.S. pivoted to “Reaganomics.”  Reagan weaponized long-held American ideals of radical individualism and used Cold War Anti-Communist rhetoric to advance a broader neoliberal economic agenda across the United States and the West (Palley, 2005). In the United Kingdom, Margaret Thatcher pushed the liberalization of capital and privatized several industries in the United Kingdom (Siddiqui, 2025). Neoliberalism is all about maximizing entrepreneurial freedoms, individual freedom, free  markets, and free trade (Harvey, 2007). Unlike the Marxist/Communist economies of the Soviet Bloc, the role of the state in Neoliberal economies is to basically stay out of the way and preserve individual freedoms and property rights (Harvey, 2007). In Poland, this is what Solidarity and other freedom fighters demanded: for the communist government to get out of their lives and economic freedom and prosperity.

In 1984, martial law was rescinded in Poland and the Solidarity participants and other dissidents were released from detention (Bartkowski, 2009). Lifting martial law did not do anything for the Polish economy as it continued to sputter along. Real output in the economy kept dropping and inflation was rising although the real numbers were repressed by the government (Ouanes & Thakur, 1997). The Polish government was so desperate at this point they started to take measures to decentralize some aspects of the economy and allow state enterprises to have more control over investment and planning (Ouanes & Thakur, 1997). None of this worked because free-market mechanisms cannot function without a proper free-market economy. The largest achievement of the Communist system by the time of its collapse in 1989 was the impoverishment of the nation (Ouanes & Thakur, 1997). The wheels were falling off, and when the Berlin Wall fell in November 1989, this marked the undeniable beginning of the end for all of the Communist regimes in Central Europe.

Meanwhile the neoliberal reforms in the Western world were lifting the U.S. out of an early decade economic slump. While “Reaganomics” initially brought some short-term economic difficulties, by the end of the decade the U.S. economic and political juggernaut was back in full force. Inflation had cooled and GDP was getting hot (FRED, 2026). Many Western nations, including the U.K. and the U.S., were on neoliberal tears. Instead of taking more control, governments were actively deregulating and privatizing industries. Governments in the 1980s were applying free market principles touted by David Ricardo by removing state-imposed trade and market barriers (Hunt & Lautzenheiser, 2011). Reagan also kept the Keynesian principle of deficit spending alive by heavily investing in defense spending during the 1980s despite campaigning on neoliberal economic policies.  Reagan was hedging this deficit spending by betting that the industries would provide jobs and capital, which proved correct (Palley, 2005). He was also playing a geopolitical poker game with the Soviets by putting everything in the pot and continuing to raise the stakes. Ultimately, the Soviets folded.

Poland was one of the first dominoes that fell away from communism. By 1988 there were more strikes and more unrest. The major shift in the Communist bloc occurred when Mikhail Gorbachev became the leader of the Soviet Union in 1985. Gorbachev had shifted Soviet policy away from intervening in neighbouring states (U.S. Department of State, n.d.). It looked like Gorbachev was accepting the reality of what was about to unfold. The communist regimes were about to be swept away by the current. Communist regimes kept attempting market reforms but forgetting they required an actual free market, so they never amounted to any good. The Polish government raised food prices by 40% in 1988 (BBC News | Communism | Poland, n.d.). By mid-1988 the strikes had gotten so out of control that the government gave up and decided to negotiate with Solidarity, leading to the “Roundtable Talks” in 1989 (BBC News | Communism | Poland, n.d.). This system was no longer sustainable and no one wanted it anyway.

By June 1989, the nearly forty-five-year failed experiment was over. Free elections occurred in Poland and Solidarity was victorious as the people’s choice. What would come next would set the stage for Poland’s bumpy rise to become a European and eventually world economic power. 

References

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Siddiqui, K. (2025). Neoliberalism and the Performance of the UK Economy: A Critical Review. World Review of Political Economy, 16(2), 224–251.

U.S. Department of State. (n.d.). Milestones in the History of U.S. Foreign Relations—Office of the Historian. Retrieved September 8, 2026, from https://history.state.gov/milestones/1989-1992/fall-of-communism