Too much expansion of the public sector for a weak economy to endure Excessive

Too much expansion of the public sector for a weak economy to endure. Excessive expectations by the rank and file of what government can deliver Persistent demands by voters for income distribution by the state rather than stimulation of production Inability of government to weed out aging industries due to strong unions 1998-present starts where the conservative party left off – pro business, new educated system, balanced budget over the business cycle, lower taxes, deregulation of the labor market, make microeconomic policies independent of politics, the new labor party disassociation from the labor unions. Blairism (The Third Way) Unelectibility of the Old Labor Party 1979, 1983, 1987, 1992 New Labor Party – maintained middle of the road policy, maintains strategic alliance with the US, Continues to privatize many assets remaining in state hands, Instituted public-private partnership (PPP) with private finance initiatives, national health service remains secure as an important symbol of social security for many. POLAND Poland Created: results of an agreement reached at Yalta Conference 1945 A)During invasion two resistant groups: 1) national army of liberation 2) communist peoples army. B) 1946 elections in Poland, Communist Party received 90% of vote. National army of liberation eliminated. C) 1949 Comm. party became the only Political party in Poland. D) 1952 constitution based on Soviet Union was instituted in Poland: 1) agriculture was collectivized 2) central economic planning was imposed. Yalta allowed the soviet union to extend it’s influence on Poland. Reasons why communism did not take deep root in Poland. Poland had no tradition of communism before WW2. Roman Catholicism is resistant to change. Polish resentment of any outside power which had made Poland a battleground for centuries Huge country - 38-40 million people - hard to change Economy of Poland after 1945 Central Planning Resources were directed to such industries as iron, steel, chemicals, and heavy machinery: Lack of consumer goods A) profitable industries had to subsidize unprofitable ones B) high operating costs C) decline in capital and labor activity E) obsolete technology F) lack of competition G) very poor economic infrastructure H) low state investment I) insufficient allocation Industries were subsidized Agriculture in Poland after 1945 In 1970's, Poland became a net importer of food. Most Polish farms were too small to achieve economies of scale. Income too low for mechanical equipment. Processing facilities such as slaughterhouses and meat processing plants were run by inefficient state monopolies. Distribution system was inefficient - waste and spoilage occurred before farm products could reach the consumers. Agriculture sector was ignored. State investment in agriculture was relatively low.