The 9th Congress of the Polish Economists
(by Stanisław Rudolf)
The Congress of Polish Economists was held in Warsaw Marriott Hotel on 28 - 29 November 2013. The Congress gathered more than 600 economists from academia and business practice, as well as politicians. Nearly 250 papers were prepared for the Congress. The Congress was held under the patronage of the Polish President Bronisław Komorowski. The Congress was organized by The Polish Economic Society (PTE) and was open to all economists.
The purpose and subject of the Congress
The congresses of Polish economists, organized every few years were always considered as important events concerning the fundamental problems of the Polish economy and economic sciences. Tradition of congresses dates back to 1887 when Polish economists and lawyers from the three partitions organized the First Congress of Economists and Lawyers in Krakow. After World War II, subsequent meetings and congresses were organized in times important for the country. One should mention here for example the Congress in 1956, organized during the so-called economic and political thaw or the Congress in 1987 right before the shift in socio-economic system. The Congress in 2007 became also a part of such events, the first since Polish accession to the EU, hence its theme: “Poland in the global economy - opportunities and threats”, which alluded to the accession.
The 9th Congress of Polish Economists was held in special circumstances, in the aftermath of the global economic and financial crisis that began in the years 2007/2008 in the U.S. The crisis has revealed the scale and scope of globally disturbed equilibrium, including the equilibrium between the financial sector and real sector. Poland passed through the crisis relatively gently, much better than other European countries. During the five years of the crisis the cumulated GDP for Poland increased by nearly 20%, while GDP growth in other countries was zero or below. Only in the last year, the GDP growth rate slowed down significantly, below one percent. The uniqueness of the current Congress, however, lies in the fact that, starting from the second quarter of 2013, the GDP growth rate clearly accelerated and all indications are that economic recession is behind us. This fact had a significant impact on the congressional debate, which was dominated by pro-development topics.
The crisis has brought a significant shift in the theory of economics which is also reflected in the deep differences of views between the prominent representatives of the major schools of economics. This is accompanied by the evolution of views which generates new trends in economic theory. This gives rise to a lot of questions and doubts regarding the causes of the crisis and difficulties to overcome it. Hence the slogan of the 9th Congress was “Economics for the future. Explore the nature and causes of economic phenomena”
The 9th Congress of Polish Economists was aimed at a discussion on the nature and causes of the ongoing changes and new developments in the global, regional, and national economy. The discussion was held taking into consideration global challenges and forecasting aspects. The new trends in economics and management were discussed, as well as in other disciplines. The aim of the Congress, similar to the previous congresses, was to present the latest research results, exchange views and experience in this respect between economists representing academics and practitioners, politicians, and representatives of other disciplines of science. The discussion resulted in a synthetic picture of the current and forecasted situation in economic theory and economic practice, taking into account the global and local fundamental challenges.
The formula of the Congress was broad, so that - on one hand to enable the participation of the widest possible group of participants, including Polish economists resident abroad - on the other hand - to create opportunity to present and discuss the issues vital for the state and prospects of development of science of economics in Poland. The Congress was conceived as a forum for all economists, not only affiliated to the PES and thus it was a unique opportunity to exchange ideas between theoreticians and practitioners, between economists representing various centres and theoretical trends in the economy and the representatives of other disciplines of science. The list of the Congress themes was a result of the discussion that went on the forum of the PTE Scientific Council and the PTE Programme Council.
The 9th Congress was preceded by seminars and other discussions organized by PTE in 2012 and 2013, with a wide participation of economists. Of particular interest were the discussions within the “Thursdays at the Economists” and the “Strategic Thinking Forum” seminars. Detailed reports of these debates have been featured on the website of the PTE and the selected materials also in the “Bulletin of PTE”.
The congress was attended by over 600 people, scientists from all academic centres and business practitioners, as well as politicians. The congress was also attended by Polish economists who are resident abroad, mainly in the USA, the UK, Germany, and Sweden. Nearly 250 scientific papers were prepared for the Congress. Almost all the authors took part in panel discussions.
Introductory speech to the Congress was presented by Professor Marek Belka, the President of the Polish National Bank. His speech was entitled “Why only to discover? The lessons of the current crisis for the economics and economic policy.” Then, the main panel of the Congress took place, entitled “The fundamental problems in the theory of economics and business practice” which was moderated by Professor Elżbieta Mączyńska - President of PTE and by Professor Bogusław Fiedor, the Chairman of the Scientific Council of the PTE. This panel was attended by such economists and politicians as Dr. J. Lewandowski - EU Commissioner, Professor J. Hausner, Professor G. Kołodko, Professor J. Osiatyński, Professor Z. Sadowski, Professor M. Ratajczak, Professor A. Koźminski, Professor T. Szapiro, Dr. A. Arendarski, as well as by Polish economists working abroad: Professor L. Orłowski and Professor P. Pysz.
Panellists responded to the theses presented by the organizers which concerned in particular dysfunctions in the economy, responsibility of economists for a failure to recognize the crisis, expectations addressed to economics and related disciplines in the existing economic situation, further development of economic sciences, as well as many other issues of key importance for economic and social development. It was pointed out in the discussion that the economy fails to overcome new and emerging crises, that it is necessary to apply interdisciplinary approach to this end as well as achievements of other sciences, especially anthropology. It was emphasized that the world is now more complex and uncontrollable. To overcome the crisis it is necessary to apply culture related resources.At the end of the panel discussion the representatives of other disciplines and environments were asked to comment on the statements. The comments were presented by Professor H. Wirth (President of KGHM “Polska Miedź”), Professor A. Czapiński (sociologist, Warsaw University), Professor K. Modzelewski (historian, Polish Academy of Sciences) and Dr. R. Petru (Chairman of the Association of Polish Economists). These comments pointed to the need for socialization of economics, the need to develop the so-called economics of social responsibility. It was also emphasized that the current development of Poland was made primarily with individual skills of Poles and low wages, with limited use of the so-called social capital. This may cause economic stagnation after 2020, when the funds of the European Union are exhausted. A much higher level of social capital is required to continue the development of a sovereign economy. These comments were an important complement to the said discussion and were also a kind of its general summary.
Further deliberations were continued at panel meetings. There were four parallel panel sessions. In total, 16 such sessions were held, attended by about 200 panellists. The panellists were the authors of the papers prepared for the congress, but their presentations focused on issues specified in advance by the moderators. After the panellists’ speeches, numerous participants of the Congress took the floor. In this way, the Congress has been enriched with many new speeches and voices in the discussion. It should be noted that both the papers and transcripts of panel discussions can be found on the PTE website (www.pte.pl).
This was followed by thematic panel sessions on the following issues:
1. Economic science: stylized facts and the challenges of modernity (2 sessions)
2. Controversies and disputes over the economy - the state and the market, economic growth and social cohesion (2 sessions)
3. Poland in the European Union and in the global economy (2 sessions)
4. Education for balanced and sustainable development and for socially responsible business
5. Determinants of the development of Poland. The labour market, demography (2 sessions)
6. Determinants of the development of Poland. Innovation policy (2 sessions)
7. Determinants of the development of Poland. Public Finance (2 sessions)
8. Determinants of the development of Poland. Agriculture (2 sessions)
9. Determinants of the development of Poland. The financial sector
A plenary session was held at the end of the Congress. Moderators of all sessions made brief statements about their sessions. The plenary session ended with a plenary discussion.
It is difficult to precisely summarize such a great event as the Congress of Polish Economists. This will be possible in relation to particular issues discussed at the Congress. Moderators will make such session summaries in the introductions to books that will be published on the basis of papers prepared for the Congress, the moderators will be their editors. We plan to release 11 books with papers with positive feedback from reviewers. The books will be released in 2014.
Huge interest in the Congress, evidenced by the number of participants, the presence of prominent guests and many publications and media coverage, reflect well the high level of economic sciences in Poland, as well as the condition of the Polish Economic Society, the organizer of the Congress.
Detailed information about the 9th Congress of Polish Economists and papers are published on the website of the PTE http://kongres.pte.pl/kongres/Achievements of the 9th congress will be published in the form of several monographs. One of them with plenary papers will be published also in English similarly, as after the 7th Congress which resulted in the “Poland's transition and its future”, edited by Elżbieta Mączyńska, PTE, Warsaw, 2009, (see http://www.ksiazkiekonomiczne.pl/art/show/132/polands-transition-and-its-future-red-nauk-elzbieta-maczynska )
THERE IS NO SINGLE CORRECT THEORY OF ECONOMICS
The 9th Congress of Polish Economists:Economics for the future: Explore the nature and causes of economic phenomena.
(by Elżbieta Mączyńska)
This text was prepared to celebrate the 9th Congress of Polish Economists, which took place in Warsaw at the end of November 2013. As demonstrated by the history of congresses of Polish economists, the congresses were held in highly diverse socio-economic and political conditions; therefore their central ideas were kind of the sign of the times. (See (http://www.kongres.pte.pl/kongres/idea-kongresu.html). This also applies the 9th Congress of Polish Economists, which took place at the end of November 2013. The Congress was held in the period in which the economic situation of individual countries and the world was formed primarily by factors which were the consequence of the global financial crisis that began in the years 2007/2008 in the U.S. and evolved into the economic crisis and finally into the debt crisis, which still plagues many countries. The global crisis reveals the scale and scope of globally disturbed balance in socio-economic systems as well as the shortcomings and inadequacy of economic theory to the realities and requirements of sustainable development and solid foundations of prosperity, both in the sense of Adam Smith and Ludwig Erhard. Due to the unprecedented deep and rapid economic and social transformations on a global scale economists face problems and questions without ready-made solutions and unambiguous answers. This is accompanied by the evolution of views which promotes the development of new trends in economic theory. Many questions and doubts arise about “the causes of things. Those who do not know the “the causes of things”, do not know the truth and have no real knowledge. Hence, the importance of their recognition, because Scire est rerum cognoscere causas -knowledge is to know the causes of the things. This is expressed by the slogan of the 9th Congress: “Economics for the future: Explore the nature and causes of economic phenomena. “ This subject is all the more important because as a result of the global crisis the reputation of economics as a science has seriously suffered and consequently, the reputation of economists. “The Economist” simply states that among the economic market bubbles that burst as a result of the crisis, particularly spectacularly burst the reputation of economics itself. Economists are blamed for the crisis, and for the fact that they were not able to foresee the crisis. In addition, those few who predicted it, had not been listened to. Hence, currently, a fundamental problem of economists is to restore the lost reputation of economics. This issue is the subject of many of the more than 230 papers presented at the congress.
Professor Marek Ratajczak, Under Secretary of State at the Ministry of Science and Higher Education emphasizes in his paper that the current global debate often puts “the sign of equality between the economic crisis and the crisis of economics as a science”. A similar opinion was formulated by Marek Belka, the President of the National Bank of Poland who also took part in the Congress and pointed out that “the sources of the current crisis are very diverse and quite comprehensive in nature, but among them are definitely both the gaps in economic theory and mistakes in macroeconomic and regulatory policy. This assessment is followed by obvious postulates to expand, supplement, and change the theory. “
What unites a lot of the papers prepared for the Congress is the recognition by their authors that economics as a social science needs to change because the world is changing.[ To co łączy wiele sposrod przygotowanych na Kongres referatów to uznanie przez ich Autorów faktu, że ekonomia jako nauka społeczna musi się zmieniać, bo zmienia się świat] The ups and downs, among others, of Keynesian theory, neoclassical economics, and also good and bad times for application of ordoliberal concept of a market economy confirm the need to take into consideration the changing socio-economic reality into the theory of economics. In this sense it can be considered that there is no one correct theory and in every trend of economics, in every school of economics, one can find the tools and solutions which only in certain circumstances translate into practice. This is no coincidence that the Keynesian theory can be considered suitable for the difficult challenges of crisis in the economy, although, this view is also called into question. In turn, the Ordoliberal theory - focused on the socio-economic order and balancing of the economic, social, and environmental targets - may be useful as a theoretical basis for the recovery of such order. Therefore a new space is being created for the diversity of trends in economic theory. Diversity is the counterweight to the doctrinalization of the neo-liberal economics, so characteristic of recent decades. This is pointed out not only by researchers and practitioners, but also by students. In 2012, the students of the Faculty of Economics of the University of Manchester established the Post Crash Economics Society. Under the slogan “The world has changed, the syllabus hasn't - is it time to do something about it?” the organization demands to enrich the curriculum with heterodox economics.
Currently, there are favourable conditions for the development of alternative currents of economics. Professor Jerzy Hausner stressed in his paper that “the global economic crisis provokes a revision of a number of findings of neoclassical economic theory. Many components of economic heterodoxy gradually enter into “mainstream economics”. Thus, the economic theories better than in the past “assimilate” the achievements of other social sciences. “In contrast, Professor Grzegorz Kołodko simply noted, that “in the future heterodoxy will dominate, and the economics itself will absorb more and more interdisciplinarity. The next generation will need economy of moderation and the theory which will describe it, as opposed to the previously dominant economy of either deficiency or excess. “This trend is all the more likely because drawing inspiration from behavioural economics, the economics of complexity is gradually developing, as well as economics of imperfect knowledge and institutional economics. The economics of complexity seeks to show each economic phenomenon, taking into account as many of its aspects as possible, not only quantitative but qualitative too, as well as using the heritage of other scientific disciplines, including primarily sociology, psychology, and even anthropology and ecology. The new trends in economic theory include what is missing in mainstream economics, neoclassical economics, and in neoliberalism. Owing to this there are favourable conditions for the economy to evolve from a model known as “economic imperialism” into a wider cooperation with other social sciences, which prevents a sort of autism in economic theory. Such an approach of economic theory could better serve the practice than in the past.
The fundamental problems of economic practice were dealt with in a number of papers viewed against the background of the analyses of state and directions of change in economic theory. The discourse is not just about economic sciences, but also about the main determinants of socio - economic development, including globalization, models of socio-economic system, public finances, innovation, labour market, changes in education, the functioning of the financial sector and other sectors of economy, and also about the destruction and various dysfunctions in this regard.
At the same time the debate at the congress considered issues relatively rarely undertaken in economic analyses such as the issues of conceptual chaos characteristic for many economic debates, including lumping together so substantially different concepts of classical liberalism, ordoliberalism and neoliberalism. Many papers emphasized that liberalism serves good the rationality of economic policy but in this context it is important to distinguish its basic variations. Meanwhile, in the economic literature and journalism liberalism, neoliberalism, and ordoliberalism are often used interchangeably, almost as synonyms, without exact formulation of their essence and essential distinction. Also professor Piotr Pysz points out to this issue. (Oldenburg - see also: http://www.pte.pl/pliki/2/12/Orientierungen_139_Maczynska_Pysz.pdf). This type of conceptual disorder is not conducive to objectivization of assessments of the consequences of the liberalization of the economy, sometimes unjustly blaming precisely liberalism as liable for the irregularities occurring in the economy and this can have negative decision making consequences.
Another important issue taken in the congressional debate issue was the problem of measuring the socio-economic achievements and constraints that are characteristic of the basic measure of these achievements, i.e., the gross domestic product (GDP). The measurement of economic performance and social achievements is one of the most important issues both in economic theory and economic practice. Not enough that a fully satisfactory solution for this issue has not been found, in addition with the progress of globalization and the growing complexity of socio-economic relations, it is becoming increasingly more complicated. Errors in the measurement result in the errors in the statistics, which increases the risk of erroneous decisions. GDP is a rigid quantitative measure. This measure does not take into account, however, the soft values, so important for the quality of life and business, such as confidence, peace of mind, aesthetics, etc. Extremely good is here Einstein’s adage, growing ever more popular (as a result of the development of internetization, virtualization of economy) that not everything that counts is countable, and not everything that is countable, counts. It is therefore difficult to overestimate the role of the analyses focused on rationalizing the measurement of socio-economic achievements. The need for this type of analyses has been also recognized and exhibited by the European Union, which was expressed in the Resolution of the European Parliament from 2011 on “GDP and Beyond: Measuring Progress in a Changing World”. Preliminary concepts of the so-called post-GDP models of socio-economic policy have been drafted with more attention paid to quality, soft factors. Such an approach can promote sustainable growth of the social well-being.
Another subject matter of the debate closely linked to social well-being was the issue of preferences adopted in the socio-economic policy. This is a fundamental matter, requiring in-depth, comprehensive analysis of alternative targets and possible directions of socio-economic development. This is especially important since - as research shows - dysfunctions of the modern economy are largely a consequence of improper organization of social and political system, rather than a lack of goods. The studies demonstrate the need to move beyond economism, to change the relationship between the sphere of economy, ecology and the social sphere, as well as the necessity to define the new role of the state. The opposition of the state and the market, characteristic of neoclassical economics does not find justification because each market must be regulated by the state, especially if the economic, ecological, and social targets are to be holistically considered. This speaks for the “optimum state” model rather than the “minimum state” model. The analyses on this topic are even more relevant because there occur - burdened with an increasing risk - changes in the functioning of the state, i.e., the transformation of the “tax state” into the debt state. Because of the policy of tax cuts adopted in many countries - and carried under the slogan “starve the beast” (i.e., the state) - noticeable is progressive decline in state budget revenues from income taxes which is accompanied by an increase in public debt. As a consequence, the dependence of the state on the financial sector is increasing, and at the same time the transparency of the relationship between these two parties (the state and the financial sector) is decreasing. At the same time the declining tax revenues force the state to limit of investment and public services which in turn drives the growth of lending to households by banks. The scarcity of public services such as educational services is forcing households to private funding. This is another factor increasing the share of the financial sector in the economy is increasingly driven by the loans which in the literature is referred to as “private Keynesianism” (this is pointed out, among others, by the German economist and political scientist W. Streeck). Viewed against this background, the problem of preferences in the socio-economic development policy is exacerbating. Such a policy should in fact promote the welfare of the country and society.
The Congress of Polish Economists was focused on the theoretical and practical activities conducive to the welfare of the country and society. The debate at the Congress created an area for new reflections, questions, and proposals for solutions and recommendations on the most difficult socio-economic issues in economic theory and practice.
The achievements of the congress consist of papers, problem questions and the debate, in which more than 600 people participated. I encourage you to read detailed materials of the congress available on the website of the Polish Economic Society, (http://www.kongres.pte.pl/kongres/)
 Under such title the “Obserwator finansowy” published an abridged version of the text (see: https://www.obserwatorfinansowy.pl/tematyka/makroekonomia/nie-ma-jedynie-slusznych-teorii-ekonomii/