We have to run twice as fast in order to catch up with the world

Statistical data show that in recent years there has been no change in the degree to which Poland lags behind the United States in terms of economic development, measured as the share of employment in agriculture.

It can be assumed that the transition from agricultural (agrarian) development to industrial one occurs when the share of employment in agriculture drops below 50 per cent of the total number of employees. Meanwhile, the transition from an industrial economy to a post-industrial economy (sometimes referred to as the service economy, or the dual economy) occurs when the share of employment in services exceeds 50 per cent.

In the United States (ever since the United States overtook the United Kingdom in terms of economic development in the 19th century, it has become the reference country to which others are compared) the transition to an industrial society occurred around 1885, while the transition to a post-industrial society took place around 1955. These two dates, 1885 and 1955, can be seen as the reference years, which allow us to see how far a given country lags behind USA in terms of economic development.

When we look at the labor market statistics in Poland, we can conclude that the share of employment in agriculture fell below 50 per cent around 1955, while the share of employment in services reached 50 per cent around 1998. On the basis of these data we can therefore estimate that in the second half of the 1950s, Poland was lagging behind the United States in terms of economic development by about 70 years, while at the end of the 20th century this development gap decreased to about 45 years.

Right after the 100th anniversary of Poland’s return to the political map of Europe, it is worth finding out about the degree to which Poland was lagging behind the US over the course of the last century.

The development gap increased during the interwar period

In 1921, shortly after Poland regained its independence, 64 per cent of the total number of Polish workers were employed in agriculture. In USA, such share of employment in agriculture was achieved around 1845. We can therefore say that at the beginning of the 1920s Poland was lagging behind the US in terms of economic development by about 75 years. Meanwhile, in 1921 the share of employment in services reached 19 per cent of the total number of employees in Poland. In the US such share was achieved around 1850, which puts Poland about 70 years behind in terms of development.

On this basis we can determine that in 1921, shortly after regaining independence, Poland was lagging about 70-75 years behind the US in economic development.

Using similar estimates, we can conclude that in 1938, when the share of employment in agriculture reached 59 per cent (in the US this share was reached around 1853), Poland was about 85 years behind USA in terms of economic development. With the share of employment in services reaching 18 per cent in that same year (in USA such share was achieved around 1840), Poland was lagging behind the United States by about 95 years. We can therefore estimate that at the end of the interwar period Poland was 85 to 95 years behind the US in terms of economic development.

These results indicate that despite the many unquestionable achievements of the Second Republic, Poland’s relative economic position clearly deteriorated during the interwar period. The development gap between Poland and the most developed country in the world increased by about 20 years.

In 1950, after the end of World War II, the share of employment in agriculture in Poland amounted to 56 per cent. In the USA the same share was achieved around 1863, which means that Poland was lagging about 85 years behind in terms of economic development. In that same year, the share of employment in services in Poland was 19 per cent. In the United States this share was reached around 1850, which indicates a development gap of about 100 years.

This means that during the first years of the Polish People’s Republic, the development gap between Poland and the USA was only slightly greater than before the outbreak of the Second World War (and amounted to about 95 years).

The progress made during the Polish People’s Republic

Let’s now take a look at the situation in 1990, during the fall of the Polish People’s Republic and the beginning of the Polish transformation towards free market economy. At that time, the share of employment in agriculture was 28 per cent in Poland, while in the United States this share was reached around 1925, which indicates a development gap of roughly 63 years. At the same time, the share of employment in services in Poland was 36 per cent, a level reached in the USA around 1922, which means a development gap of about 66 years.

Therefore, the data shows that significant progress had been made during the 40 years of the Communist economy in Poland. The degree of Poland’s backwardness in terms of economic development had been reduced to about 65 years (i.e. by about 30 years). While a lot of bad things had happened during communism, when it comes to the structural changes in the economy, the scale of the progress is clear. The question of the social cost of that progress (mainly manifested in the very low standard of living of the population) is a separate issue altogether, which would require a longer discussion.

Let’s now examine the period of transformation in Poland. In 2010, after 20 years of economic transformation, the share of employment in agriculture in Poland was 16 per cent. In the United States such share of employment in agriculture was achieved around 1952, which means that at that point Poland was about 58 years behind in terms of economic development. At that time, employment in services in Poland accounted for 57 per cent of the total employment. In the US the share of employment in services reached 57 per cent around 1968, which puts Poland behind by approximately 42 years.

This means that during the first 20 years of the Polish transformation, the degree of Poland’s economic backwardness in relation to the United States was reduced by about 15 years (from about 65 years to about 50 years). Poles can be pleased with this result. However, a certain disturbing trend has been observed recently.

The Red Queen’s race

There are many indications that in recent years this process of catching up has slowed down. In 2017, employment in agriculture in Poland accounted for 10 per cent of the total employment. In USA, such share of employment in agriculture was achieved around 1960, which indicates that Poland is lagging behind in development by about 57 years. At that time 59 per cent of employees in Poland worked in services. Meanwhile, in the US such share of employment in services was reached around 1970, which indicates a development gap of about 47 years.

It is clear that if we measure the degree of economic backwardness by the share of employment in agriculture, little has changed in recent years. However, judging by the share of employment in services, the situation has clearly deteriorated (the development gap increased from 42 years to 47 years).

After calculating the average value of these indicators, we can conclude that in 2017 Poland was lagging behind the United States in terms of economic development by about 52 years, i.e. by two years more than in 2010.

There is no doubt that Poles can be satisfied with the achievements of the last 28 years devoted to the development of a new society. The growing standard of living (measured, for example, by the income per capita, GDP per capita, or the average life expectancy at birth) is encouraging.

Perhaps — considering the rate at which the whole world is developing — we should go back to the tale of Alice’s adventures in Wonderland and recall the idea known as the Red Queen hypothesis. In the novel, the monarch explained to Alice that in Wonderland, “it takes all the running you can do, to keep in the same place”. Meanwhile, “if you want to get somewhere else, you must run at least twice as fast as that!” (Lewis Carroll, Through the Looking-Glass, and What Alice Found There).

Unfortunately, in the last 10 years Poland not only hasn’t been “running twice as fast” but one can even get the impression that the country has been running more slowly than at the beginning of its economic transformation.

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