Christianity and capitalism

The Times May 25, 2006 A capital gain for everyone By Edward Lucas

; IT IS A characteristically Anglican mixture of breast-beating, self-congratulation, waffle and wishful thinking. But in the 100-odd pages of Faithful Cities, the Church of England’s new report on urban poverty, there is one glaring absence. The real poverty-busters — the people who create wealth and jobs — feature nowhere at all. Business appears only as a greedy and unwelcome backdrop. Mercifully, the committee of clerics, do-gooders and hand-wringers (not an entrepreneur among them) who wrote the report do not repeat all the pseudo-Marxist gobbledegook of Faith in the City 20 years ago. They grudgingly admit that Britain has got richer in the past 20 years, though their simplistic parody of economic history gives no credit to the benign effects of union-busting, privatisation and deregulation under the Conservatives, nor to the low inflation and sound money policies of new Labour. Instead, they try to solve poverty by spraying it with jargon, of the kind produced by people trying to sound profound when hopelessly out of their depth. “It is a salient fact that market capitalism goes into decline if the market is populated by people who exercise self-restraint, are aware of the needs of others and reflect on the wellbeing of the planet.” That’s a bizarre misunderstanding of the economic system that has lifted billions of people out of poverty. Capitalism depends on rules (contracts, property rights) and self-restraint (if you don’t save, you don’t accumulate capital). And if you ignore the needs of others, you go bust fast. Wealth does not mean selfishness. Private philanthropy is a huge force for good in America now, and used to be in this country too, before taxation eradicated the charitable instinct of the rich. Big government, by contrast, has a dismal record, and the ghastly slums and ghettos it has created are true temples of misery. So, encourage prosperity, generosity and mobility. Capitalism brings all three. But instead, the report bangs on about “faithful capital” (which seems to mean a collective conscience). But using the C-word ties the authors up in knots. Archbishop Rowan Williams’s foreword to their report moans that it has a “doubtful aura”. That queasiness is paradoxical. “Capital” is the only word in the report that is meaningful and counters poverty. Britain’s inner cities could do with more capital, and fewer reports.

clouds

Meteorology

Radiantly cloudy

May 25th 2006
From The Economist print edition

The Cloudspotter's Guide: The Science, History and Culture of Clouds By Gavin Pretor-Pinney Perigee; 304 pages; $19.95. Sceptre; £12.99 Buy it at Amazon.com Amazon.co.uk

CLOUDS have had few friends. A metaphor for sadness and confusion, they have long been seen as spoiling the weather, rather than being one of its most lovable and interesting aspects.

Now a fondly compiled compendium of the nebulous world's facts and fancies redresses the balance. The author, Gavin Pretor-Pinney, is the founder of the Cloud Appreciation Society, and aims to convert even the most sun-loving reader. He introduces the half-dozen main types of clouds as if they were his oldest friends: there is the towering, thunderous cumulonimbus, the beautiful cirrus, the fluffy, fine-weather cumulus. Even dull, ponderous old stratus—basically fog-in-the-sky—gets a friendly mention.

When his head is not in the clouds, the author runs a magazine for dilettantes called the Idler. But his research for the book betrays a startling diligence. References abound to clouds in history, art and literature. “The Birds”, a play by Aristophanes, is cited to illustrate stratocumulus, those clouds that look so tantalisingly like a magic country in the sky. He reproduces Andrea Mantegna's magnificent “Martyrdom of St Sebastian”, which dates from the 15th century, not for the striking image of the arrow-pierced saint, but as one of the first pictorial depictions of a cloud (though the artist muddles his cumulus and cirrus).

The cultural, scientific and biographical references are interwoven in a whimsical style that readers may find either infuriating or captivating. But they certainly serve to enliven what a more leaden pen would turn into a schoolroom exercise of memorisation and lexicography. After a few chapters, the reader is delighted to learn that there are four types of cirrus (intortus, radiatus, vertebratus and duplicatus).

A pilot's account of a high-altitude parachute descent through a thunderstorm is gripping. So is the search for the “Morning Glory”—a rare, rotating tubelike cloud best seen in remote northern Australia. Plain old sunshine seems dull in comparison.

Demography in eastern Europe

Red fades to grey

May 25th 2006
From The Economist print edition

Ex-communist countries risk growing old before they become rich

POOR countries have high birth rates. As they get richer, family size drops. That is a handy rule of thumb, but one that post-communist Europe is disproving. The worst outlook is in such places as Ukraine and Bulgaria, where the population is expected to fall sharply by 2025 (see chart). In the Baltic countries of Estonia and Latvia, demographic prospects are bleak too, but their economies are rather stronger.

But everybody, including such relatively rich countries as Hungary and the Czech Republic, should be worried. As the World Bank argues in “The Third Transition”, a study that will be published later this year, old populations tend to mean slower growth. There are fewer workers. Oldies are (on average) less productive. Health-care and pension bills rise.

Bad demographics are a communist-era fluke. Female fertility normally drops when wealth and education rise. Communism created the odd combination of women who were educated to rich-world standards, but lived in countries left destitute by the collapse of central planning. Women in communist countries also bore their children young, typically in their early 20s. Choosing to have fun and make money like their rich-country sisters has cut the birth rate, at least temporarily. In Poland, the commonest age for bearing a first child was 22 in 1989. By 2001 it was 26.

This is aggravated by instability and corruption in the poorer post-communist countries. Having wasted the past 15 years, they now lag behind their counterparts, face greater difficulties and are less able to pay for them. It is not all hopeless. But the demographic outlook makes faster growth and reform a lot more urgent. Empty places in schools, for example, should make it possible to put more money and effort into the task of sorting out universities, which are mostly dire: cash-strapped, corrupt and old-fashioned.

Experience in Estonia suggests that the right incentives can help. Generous parental leave introduced in 2003 brought an immediate rise in births, with 800 more babies born in 2004 than in 2003, and 1,200 more in 2005. The government is introducing subsidised in-vitro fertilisation. It needs to: its measures so far have slowed the population decline, but been nothing like enough to reverse it.

It may be more practical to attempt to get rich more quickly than to grow old more slowly. But even here the post-communist countries have plenty to do. New forecasts published this week by the European Bank for Reconstruction and Development suggest that average annual growth in the 27 countries that it covers is likely to be only 4.5% between 2007 and 2012 , down from 6.7% in 2004 and 5.6% in 2005. That, argues Erik Berglof, the bank's chief economist, is because foreign direct investment—the biggest contributor to growth—was unusually high in recent years and will now fall. “The cost advantage will level out quite quickly,” he says.

That may be too gloomy: the best-governed countries still show surprisingly high growth and investment. But that will bring little comfort to their ageing and badly run neighbours.

European Voice column

The prickliness of some powerless Poles

By Edward Lucas

"So what do you think of our country?" It is almost impossible to answer that question truthfully, interestingly and politely (though any two of the three are manageable).

It used to be easier. In the days of the evil empire, themes such as the dreadfulness of communism, the tragedy of history, and the west's shameful weakness prompted either pleased assent, or an enjoyable ding-dong.
Now it is a lot harder. Real things have happened - economic reform, EU membership, emigration and so forth - and there are real disagreements about them. Any outsider's comment can be taken as a sign of glib insensitivity if it's positive, or ignorant prejudice if it's not. Whatever you say risks angry contradiction.
Some countries are worse than others. Hungarians' stock response is that you can't possibly understand what is going on because of the language barrier. If that doesn't work they may hint that you are anti-semitic (if on one side) or that you've been nobbled by the Jewish lobby (if on the other). Romanians show patronising amusement at the idea that anyone would take their country seriously. "Oh my dear, you can't really be trying to understand our comic opera," tittered one doughty Bucharest lady, barely disguising her scorn for the intruder.
The smaller the country, the more flattered people are if an outsider knows anything at all, particularly if it is a bit obscure. I find that a mention of August Sabe (the last Estonian partisan, who died escaping from the KGB in 1978) unglues any conversation in that famously taciturn country. It may not be relevant, but it shows that whatever other points you make do not stem from complete ignorance.
Another good tactic is to pre-empt any talk of double standards by criticising the west, or your own country, first. That's particularly useful in Russia and Poland, where "what-aboutism" is a very common form of argument. (You mention Chechnya, they say "What about Iraq?" You mention corruption, they say "What about Blair selling peerages?"). Getting your self-criticism in first defuses that.
All this is on my mind because my Economist survey of Poland got quite good coverage in the press there and attracted reaction from people who don't normally read the paper. I've been ploughing through scores of letters, emails and postings on my blog, and trying, with mixed success, to answer everything politely.
Some of the letters were well-mannered and sensible. They picked up minor errors and omissions (as, indeed, did some of the rude and silly ones). That's a useful illustration of the wisdom of crowds. I wish articles were like software. I could have issued a "beta" version first and included all the improvements in an "alpha" release later.
The biggest lesson is that there are still a number of Poles with a strongly held and slightly neurotic belief that no foreigner can ever have anything sensible to say about Poland - and a surprising desire to express it publicly. One such correspondent, a professor at a foreign university, insists, in splendid defiance of fact and logic, that no native English-speaker could ever learn more than basic Polish. Only a "native Pole" could really write properly about Poland.
This is odd. Even the most pompous Frenchman, or redneck American, or bigoted little Englander, is willing to accept that a foreigner's view might be worth something. This intense prickliness stems from powerlessness: the feeling (all too justified in Poland' s case) of having been silenced by history. That was once an excuse, but, thank goodness, is now an increasingly poor one.

Voltaire in love...

Love and the Enlightenment

The woman behind the man

May 18th 2006
From The Economist print edition

Emilie du Châtelet was a lot cleverer than her great lover, Voltaire

EVERYONE, just about, has heard something about Voltaire, and most of it is flattering. Freethinker, dramatist, poet, scientist, economist, spy, politician and successful speculator to boot, he embodies the intellectual breakthrough of the Enlightenment—the single biggest leap in mankind's understanding of itself and the world.

Almost nobody has heard of the woman with whom he shared most of his life, Emilie du Châtelet. But you can make a good case that she was a more rigorous thinker, a better writer, a more systematic scientist, a formidable mathematician, a wizard gambler, a more faithful lover and a much kinder and deeper person. And she did all this despite being born a woman in a society where female education was both scant and flimsy. Her mother feared that anything more academic than etiquette lessons would make her daughter unmarriageable.

David Bodanis's new biography of Emilie, Marquise du Châtelet, is a belated treatment of a startlingly neglected story. One reason was male chauvinism. Her best work was done at a time when women simply did not feature in the scientific mainstream: Immanuel Kant said that counting Emilie as a great thinker was as preposterous as imagining a bearded woman. Biographers were much more interested in Voltaire himself; his sexy mistress was just a sidekick. Most writers who did research Emilie were too scientifically illiterate to understand her significance. Nancy Mitford's 1957 novel, “Voltaire in Love”, is a prime example. “Mitford knew as much about science as a shrub,” notes the author scornfully. Mr Bodanis, a former academic whose previous book, “Electric Universe” has just won the 2006 Aventis prize for science writing, is well placed to appreciate the extraordinary scope and scale of her work, and leaves the reader in no doubt of it.

Born in 1706, Emilie had three pieces of great good fortune in her life. The first was to be born with a remarkable brain. Her greatest work was to translate the “Principia”, the path-breaking work on physics by the secretive Cambridge brainbox, Isaac Newton, who died when Emilie was 20. She did not just translate his writing from Latin to French; she also expressed Newton's obscure geometric proofs using the more accessible language of calculus. And she teased out of his convoluted web of theorems the crucial implications for the study of gravity and energy. That laid the foundation for the next century's discoveries in theoretical physics. The use of the square of the speed of light, c², in Einstein's most famous equation, E=mc² is directly traceable to her work.

Emilie's second piece of luck was that her father allowed her to use her brain: not much, admittedly, but certainly far more than most bright girls of her time and country. She was not sent to a convent. He was wealthy and liberal-minded enough to buy her books and talk to her about astronomy. He married her to Florent-Claude, Marquis du Châtelet-Lomont, who was a touch dull but decent—and unbothered by his brainy wife's intellectual and amorous adventures. Indeed, he liked and admired Voltaire.

Her third great good fortune was her array of mind-expanding, appreciative lovers. They may have been unsatisfactory mates by today's standards, but they were rarities in an age when few men looked for intellectual companionship from women. Emilie started by bedding the Duc de Richelieu, the “most sought-after man in France”. He bolstered her intellectual confidence, dented by an isolated childhood and early marriage. Even when she dumped him, they remained friends. Then came Voltaire, needy, self-indulgent, unreliable and self-centred—but still the love of her life and its great intellectual and cultural stimulus. Even when passion cooled, they remained great companions.

Finally, she fell in love with Jean-François, Marquis de Saint-Lambert, a much younger poet. He filled the emotional and physical gap left by Voltaire. But he also proved careless in what passed for contraception in those days. That led to pregnancy and the infection that killed Emilie when she was only 42.

It is tempting to speculate what heights of discovery Emilie might have achieved in a healthier and more open-minded age. But that would be to miss the point. The remarkable thing is that she managed so much, and with such good humour and reflective self-knowledge.

It is her biographer's good fortune that there is a great deal of accessible material about her life. Voltaire was spied on energetically; a thicket of secret police reports remains. So too do many of her letters, both sent and received.

The book may strike some readers as slightly lubricious in its attention to Emilie's sexual habits and predilections. A more serious shortcoming, explicable only by authorial laziness (unlikely) or publisher's stinginess (all too probable) is the startling and inconvenient lack of an index. That is just the sort of slap-happy approach to which Voltaire was prone, and which so pained Emilie.

Passionate Minds: The Great Enlightenment Love Affair.
By David Bodanis.
Little Brown; 312 pages; £17.99. To be published in America by Crown in October

Alexander Zinoviev

May 18th 2006
From The Economist print edition

Alexander Zinoviev, an eternal dissident, died on May 10th, aged 83

DURING the cold war, dissidents were front-line troops in the battle of wills and ideas. Despised and persecuted by the Communist regimes of the Soviet empire, they were idealised in the West. When they emigrated, they were idolised.

It is convenient, but too crude, to assume that anti-Soviet sentiments automatically meant pro-Western ones. Although some dissidents found material and mental well-being in exile, others were horrified by the decadence and cynicism they found. Alexander Solzhenitsyn was one of the outspoken disillusioned. Another was Alexander Zinoviev.

A decorated wartime pilot and distinguished mathematical logician, Mr Zinoviev could have enjoyed a quiet and privileged life in the Soviet Union. But he became a fearless and scathing critic of his country's Brezhnevite senescence. He was already in near-disgrace by the time his greatest work, “The Yawning Heights”, was published in Switzerland in 1976. It parodied, with flashes of Swiftian brilliance, the inhabitants of a fictional Soviet city, Ibansk (roughly, in Russian, “Fucktown”). Ruled by nonentities and suffused with boredom and mediocrity, Ibansk embodied the mind-rotting stagnation of life in the Soviet provinces.

The Soviet authorities were perplexed. To jail Mr Zinoviev would acknowledge that this satire was not wholly fanciful; to ignore him would look weak. So they stripped him of his medals and academic positions. Two years later, he was encouraged to emigrate. He went to Munich, then a centre of émigré dissident life.

He loathed it. His next book, “Homo Sovieticus” (1985), was acclaimed for its dissection of the Soviet mindset. Today, it seems still more savage in its assault on the pampered, hypocritical West. “It's only among us Soviet people that defenders of the West's ideals can be found,” Mr Zinoviev wrote.

Even more disappointing to him, austere and idealistic as he was, were the self-important and subsidised marionettes of the émigré world. He had got away from the “swamp of the idiocies, vulgarities and lies that is Soviet ideology, only to be forced to plunge head first into the even more idiotic, vulgar and lying marsh of anti-Sovietism.”

That was a bit harsh. Not all Western support was self-interested, rejoicing at the discomfiture of the Soviet enemy; some Westerners genuinely desired Russia to be free. But when, eventually, those freedoms came, Mr Zinoviev was still not happy. He loathed Mikhail Gorbachev's half-baked perestroika reforms, parodying them in another book, “Katastroika”. He detested Boris Yeltsin, the first president of post-Soviet Russia, seeing him as a pawn of the cold war's vainglorious victors.

Even before he returned to live in Moscow in 1999, he took up causes that mystified his fans and delighted nostalgic communists. He strongly supported Serbia against what he saw as Western aggression, and later became a leading member of an outfit set up to champion its leader, Slobodan Milosevic, against war-crimes charges. He became an increasingly ardent defender of the Soviet Union. Stalin had rightly punished him for “terrorism”, he said. Brezhnev was too soft on dissidents. His individualism found Western conformism worse than Soviet collectivism.

He scorned Vladimir Putin's Russia, describing it last September as a “hybrid, a hare with horns”. Its ingredients, he said, were “hidden Sovietism, elements of Western values and the retarded feudalism of the Russian Orthodox church.”

Progressive regression

Mr Zinoviev's contrarian approach, cynical and idealistic by turns, reflected one school of the Russian intelligentsia. By contrast, Mr Solzhenitsyn, another ex-émigré, though no fan of either the West or modern Russia, has remained staunchly pro-clerical and patriotic. But Mr Zinoviev's émigré counterparts still found his intellectual journey fascinating. Dmitry Mikheyev, a former political prisoner and physicist turned teacher of Western-style leadership to Moscow businessmen, compared him to a character in a Dostoevsky novel: “someone not entirely sane and rather idealistic, sensitive, emotional, full of contradictions.”

His intellectual mischief-making may have been tasteless, but it was not rancorous; there was a playful, good-humoured streak. Vladimir Bukovsky, a consistently anti-communist dissident settled in Cambridge, once asked him why, to the dismay of his friends, he was suddenly defending Stalin. “Anyone can attack Stalin,” Mr Zinoviev replied. “It's more interesting to find arguments in favour of him; without Stalin, my family would still be peasants.” Mr Bukovsky countered that the victims of Stalin's purges seemed a high price to pay for the Zinoviev family's elevation; Mr Zinoviev assented with good grace.

Mapping his intellectual journey was complicated by his delight in misleading gullible Westerners. In his teenage years, he claimed, he had been sent to Siberia (fresh from being top of the class at the Moscow Institute of Philosophy, Literature and History) for plotting to kill Stalin. According to one of his oldest friends, this tale was pure invention. Mr Zinoviev was “a brilliant mystifier”. That applied to his views and his life alike.

Romania, Bulgaria and the EU

Romania and Bulgaria

A dim green light

May 18th 2006
From The Economist print edition

A mumbled invitation to join the European Union in 2007

ROMANIANS have a joke about driving to Greece. Tank up before you get to the Bulgarian border, lock the doors and windows, put your foot down and don't stop until you reach the other frontier. Bulgarians say the same about driving north to Hungary. Other Europeans, it seems, would rather drive elsewhere.

Romania and Bulgaria are due to join the European Union on January 1st 2007. This week, the European Commission could have advised that they get the formal go-ahead. Instead it fudged. Preparations for admission should proceed, it says—but with a further review in the autumn of progress on reforms. If either country scores spectacularly badly then, its accession could be put off for a year.

In practice, any such delay now looks out of the question for Romania, and highly unlikely for Bulgaria. Romania was originally seen as the more problematic of the two. It is big, with 20m people, very poor, and was until recently ruled by a venal and incompetent clique of ex-communists and their hangers-on. But over the past two years Romania has made startling progress, particularly in the trickiest areas of judicial administration and home affairs. The commission says it is now worried only about minor issues, such as improving slaughterhouse hygiene.

Such quibbles spare a few blushes next door, where the criticism is sharper. Bulgaria has signally failed to match Romania's new law-abiding ways. Gangland killings are frequent, and go unpunished. The suspicion is that the authorities are too scared, or too weak, to tackle the perpetrators. Or too complacent: Klaus Jansen, a senior German law-enforcement official, complained recently of a “kiss my ass” attitude among his Bulgarian counterparts.

The next five months are unlikely to change matters much. It is still possible, just, that the treaty sealing Bulgaria's membership will not be ratified by one of the current members. More likely is that Bulgaria will still join with Romania, but will be hedged about with more conditions. The dollops of EU money that both countries need, to build new roads and improve their public services, could be held back if reforms falter.

The real worry is not the pretence of pressure on the two Balkan front-runners, but the dimming prospects for membership elsewhere in the region. The peace of recent years in the countries of former Yugoslavia is largely held together by the hope that it will bring the eventual boon of EU membership. Indeed, in disputed places such as Kosovo and Montenegro (which votes on independence this weekend), the idea of a nation-state operating outside a tight international club such as the EU could be catastrophic.

An international commission on the Balkans, composed of grandees, recently urged the EU to keep open the door, to “show that it has the power to transform weak states and divided societies.” If it does not, it will “remain mired as a reluctant colonial power at enormous cost”. Such instability is one worry if enlargement stalls. Another is that more countries, notably Ukraine, are waiting for their turn, after Turkey, which has already begun negotiating. There is a deafening lack of enthusiasm for any of them.

À nation of cheats? Only joking

Polish con themselves with cheat sheets

By Edward Lucas

It's as hard to translate as it is to pronounce. Sciagawki (sh-chong-aahf-ki) are literally "the little things you pull out". The English word "cheat sheet" doesn't do justice to what is a thriving industry in the world of Polish education.

Sciagawki are usually just scraps of paper, tightly folded, with teeny-weeny writing. That's fine, but they are not very durable. More diligent students laminate their bits of paper (the truly skilled producers make them both laminated and foldable).
But there are commercial ones too. A Cracow-based publishing house, Greg, actually produces textbooks with readymade sciagawki: little pamphlets you can keep up your sleeve, with the contents of the main textbook printed in microscopic type. Then there are 'cheating pens' with spring-loaded rolls of paper inside. And there are 'secret writers' - pens with ultra-violet ink and a tiny bulb at the end to reveal the secrets of what seems to be a blank sheet of paper.
One reason why cheating is so endemic in Poland is that the exams are so strange. The toughest exam at Oxford is for the prize fellowship at All Souls' college. It includes an essay paper where the biggest brains in the university are presented with a choice between intimidating subjects such as 'God' and 'water'. Not much room for cheating there.
But Polish exams are largely a memory test. I was visiting a school in Cieszyn, on the Polish-Czech border, and I asked a bunch of students to show me their «sci aþgawki. They were heading for a geography test, so most of the scraps of paper bore painstakingly compiled features of physical geography (the biggest lake in Africa in cubic metres, the population of Bogata and so on). This seems to me to be pretty pointless. If you want to teach people memorisation skills (which is a good thing) make them learn poetry, not statistics.
I wanted to highlight cheating in my survey of Poland, published in The Economist last week. But sadly the space needed to explain the intricacies and idiocies of Polish politics over the past six months meant that there was little room for such colourful extras. But I did mention it at the press conference which launched the survey. Cheating in schools, I said, is far worse in Poland than in any other post-Communist country, and it affects competitiveness by devaluing the educational currency.
The participants' reaction was a ripple of unselfconcious laughter. That's the oddest thing about cheating in Poland: nobody takes it seriously. It's seen as an amusing bit of rascaldom, no more serious than parking on the pavement or breaking a visa rule. On several other occasions when I have raised this with Poles, the response was "Didn't you cheat when you were at school?" When I say that a) I didn't; b) I can't remember anyone else doing so and c) it wouldn't have helped anyway, the reaction is offended disbelief.
Cheating reflects, I suspect, a deep-seated Polish scepticism towards authority, highlighted in the commonly used verb kombinowa«c. This is also barely translatable, but means roughly "to get together against authority". The social pressure in Poland to help your pals against the bosses must come, I think, from the many decades when the bosses were foreign.
Like other post-Communist countries, Poland needs to change its education system to emphasise problem-solving and critical thinking, rather than raw memorisation. That should make «sci aþgawki redundant. But the morally soggy culture that tolerates cheating will take longer to change - and damages much more than just the education system.

Edward Lucas is central and eastern Europe correspondent for The Economist.

More on poverty & Christianity--this time an oped piece in the London Times

The starving at the West's gate

Edward Lucas

The reason for Third World poverty was already obvious centuries ago. Just ask Amos

CHRISTIAN AID WEEK is rightly a time for warmheartedness. But that is no excuse for softheadedness. It is sloppy thinking, for example, to believe poverty in one place is caused by wealth in another. To share the wealth of the rich world evenly among the poor would temporarily dent poverty, not end it. Redistribution invariably destroys wealth in one place; it rarely creates it in another. The redistributed money would mostly go on short-term consumption or be stolen by corrupt officials. The root cause of poverty, above all injustice, would remain.

Hernando de Soto, the Peruvian economist, has shown convincingly how abuse of property rights by the powerful and corrupt prevents subsistence farmers and shantytown dwellers from getting on to the first rung of the wealth-creating ladder. No property rights mean no collateral for loans, no mobility and no investment.

That still eludes much of the anti-poverty lobby. But the prophet Amos, writing three millennia ago, clearly spotted the link between poverty and injustice. For I know how many are your transgressions, and how great are your sins — you who afflict the righteous, who take a bribe, and push aside the needy in the gate.

Without enforceable contracts, the rich and powerful are free to plunder the poor and weak. Debts are uncollectable; assets unprotectable. When Amos mentioned those who “push aside the needy in the gate” he was referring chiefly to law courts but also the route to markets in towns and cities, where the poor and powerless were at the mercy of corrupt gatekeepers. Third World small businesses on the way to market suffer similarly from corrupt bureaucrats and policemen today.

Technology and capitalism now have made cheap and accurate weighing scales widely affordable, ending one of the most common ways in which the poor are cheated. But the grossly unjust taxes imposed by fiddling with money, through inflation and non-convertibility, continue. The rich and powerful can use hard currencies and foreign bank accounts; for the weak and poor, the lack of a safe way to save is yet another burden.

Even those Third World businesses that manage to put capital and labour together to develop a product that adds value and creates wealth find that the gates of the richest markets are closed. Protectionism is the ultimate institutionalised selfishness of the comfortably-off against the poor and hard-working.

The anti-poverty lobby has understood the importance of trade shamefully late and partially. Christian Aid Week will bring new calls on the rich world to open its gates. But, tragically, anti-poverty campaigners in the West have allowed themselves to be conned by the protectionist arguments of rich people in poor countries. The protection of corrupt, incompetent and uncompetitive producers and providers of goods and services in poor countries levies yet another tax on the weakest. Yet the poor above all need the best choice of goods and services at the lowest possible prices.

Nelson Mandela said last year in a speech of uncharacteristic foolishness, that “like slavery and apartheid, poverty is not natural. It is man-made.” Actually, poverty is all too natural: not so long ago a nice flint axe and a dry cave was the summit of human material ambition.

Since Amos’s day it has become pretty clear how wealth is created. There is no example of a country where trade, competition and the rule of law have not brought prosperity. Bad government, the favouring of elites, protectionism and monopoly all entrench poverty. Modern prosperity is the result of specific institutions and habits. But like water flowing downhill, wealth trickles away unless it is well husbanded.

Polite Christian society does not celebrate the wondrous wealth-creating processes of global capitalism. It winces at them. Worries about inequality (ultimately a secondary question to poverty) and, worse, a distaste for wealth, eclipse the extraordinary way in which the embrace of capitalism and global trade in India and China have lifted hundreds of millions of people from poverty in the past two decades.

This anti-capitalist attitude is as absurd as a Christian distaste for the laws of physics. It also leads to a very damaging conflation of private generosity with public policy. The overwhelming lesson of five decades of Third World aid is that, paid from taxation, it takes money from poor people in rich countries and gives it to rich people in poor ones.

Christian Aid Week should shun gimmicky slogans such as “make poverty history” and “drop the debt”. Instead, it should match stern condemnation of injustice in the rich and poor worlds alike with enthusiastic support for faster growth, more competition and freer trade.

Yet many Christians’ political and economic outlook is riddled with guilt and sentimentality, and a foppish disdain for wealth. Rather than grapple with the real roots of poverty, trivial or counterproductive gestures such as buying “fair trade” (more accurately described as “fraud trade”) products seem all too tempting. Amos had something to say on that too: he denounced the way in which rich people avoided dealing with injustice by offering conspicuous public sacrifices instead. Even though you offer me your burnt offerings and grain offerings, I will not accept them.

Edward Lucas writes for The Economist; this article is based on a sermon he gave at the Christian Aid Week service in Canterbury Cathedral yesterday

Make Gravity History--article for Church Times (related to sermon below)

Make gravity history!

It’s outrageous that water flows downhill, away from those that have too little, towards those that have too much. Sharing it is a moral issue. Physicists may try to explain the world—we want to change it. The so-called laws of physics are nothing more than an excuse to maintain the moist and do down the dry.

Absurd? Yes. But so are the anti-poverty lobby’s economics. All too often the assumption is that there is a certain amount of wealth around, and if some people have too little, that’s because others have too much. But that is just as absurd when applied to wealth as it would be applied to water. Just as some countries are drier than others, some political and economic systems are better at creating wealth than others.

The big mistake is to apply the language of warmheartedness to government policy. Charitable giving is admirable on a personal level. Paid from taxation, it takes money from poor people in rich countries and gives it to rich people in poor ones. Worse, aid comes packaged with statist economic nostrums of collective ownership, state intervention in agriculture and industry and high taxation, all wildly misguided. Tanzania, for example, has received more aid per head (and probably more advice, were that quantifiable) than any other poor country—and is now worse-off than it was at the time of decolonisation.

It is as futile to try to solve the problem of global poverty by redistribution as it would be to irrigate the Sahara desert by airfreighting ice-bergs there. Imagine that by some improbable stroke of generosity and punitive taxation, the rich world raised a trillion dollars. Imagine that by some superhuman feat of organisation, it gave a one-off thousand dollar payment to every one of the world’s billion people living below the poverty line.

Of course, the money would soon run out. The causes of poverty—the bad roads, congested ports, clogged courts, corrupt officials, poor education, savings-averse culture, disease and so on, would be barely dented.

The real message of Christian Aid week should be not redistribution but enthusiastic support for faster growth in the world economy—and particularly of the developing world’s share in global trade. There are some obvious answers: to slay the dragons of rich-country protectionism, for example; or to offer generous scholarships and easy visas for developing-country students wanting to study in the west.

But the real problem is the foppish disdain that many in the rich world show for the causes of their own good fortune.

In particularly many Christians’ political and economic outlook is riddled with guilt and sentimentality. Rather than grapple with the real causes of both wealth and poverty, it is so much easier to follow the feelgood route of trivial or counterproductive gestures: demonstrating for “dropping the debt” or buying “fair trade” (more accurately: “fraud trade”) products.

It is quite wrong, as Nelson Mandela asserted last year in a speech of uncharacteristic foolishness, to think that poverty is abnormal. Poverty is where we all started.. Barely an eye’s blink ago in evolutionary terms, having a nice flint axe and a dry cave was the summit of human ambition. Modern prosperity is not the norm, but the result of specific institutions and habits. It is not just recent, but fragile—like water flowing downhill, wealth trickles away unless it is well husbanded. The good news is that we now know the rules of that husbandry. The bad news is that so many of us are too muddle-headed to put it into practice.

For a start: free trade and competition create wealth and jobs. Protectionism and monopoly destroy them. It is bizarre that these self-evident propositions still attract such hostility and suspicion. There is no example, anywhere in the developed or developing world, of a country that got poor because it traded too freely, or liberalised too fast. There are plenty of examples of countries that have stayed poor (or, even more tragically, become poor) by following the opposite policies.

From that it follows that anti-poverty lobby in the rich world is quite wrong to defend third-world countries’ “right” to protect their domestic industries. What that means is that the poorest people in the world pay high prices for sub-standard goods. I can see (thought I don’t agree with it) why a rich country like France chooses to protect its quaint agriculture and incomprehensible films. But why allow corrupt and self-interested elites in poor countries to rip off their own people?

Secondly, the more human and financial capital you can attract, the more value you add and the better you do. So the faster and easier movement of people and money across borders, as well as of goods and services, is a great engine of global growth. Instead of bleating, patronisingly, about “brain drains”, real poverty-busters should be making migration easier—in all directions. That would put the people-smugglers out of business, and let the “drained” brains return home easily, often and productively.

Thirdly, strong institutions make wealth grow both fast and stickily. Without property rights, respect for contracts and sound money, few make money in poor countries, and those that do tend to send it quickly to richer ones. Yet the bad governments of developing countries hobble the growth of the vital institutions: strong courts and central bank.

So if Christian Aid week must have a political message, I suggest some new slogans: Three cheers for global capitalism! Free Trade Now! Spread Democracy! Down with Despots!

That’s harder, of course, than grumbling about gravity—but wishful thinking won’t make water flow uphill.

Sermon at Christian Aid Week service, Canterbury Cathedral,. May 14th

May the words of my mouth and the thoughts of our hearts be always acceptable in thy sight, O Lord my Rock and my Redeemer

For I know how many are your transgressions,
and how great are your sins —
you who afflict the righteous, who take a bribe,
and push aside the needy in the gate.

The prophet Amos spots something that still eludes many well-meaning people today. That the root cause of poverty is injustice.

That is particularly topical in a week when our attention turns to world poverty. Giving generously to the needy is no excuse for sloppy thinking about the causes of poverty and what we can do to address them.

It is sloppy thinking, for example, to believe poverty in one place is caused by wealth in another. Take from the rich, give to the poor and the problem is solved. But imagine that a latter day Robin Hood was able to grab the wealth of the world’s rich countries and distribute it evenly among the poor. For a lucky and provident handful, that bounty would catapult them into a life free of poverty. But for most, within a few weeks or months the money would be gone. Some would have gone on consumption. A large part would have been stolen by corrupt officials. But the root cause of poverty—the crippling handicaps of bad roads and ports, poor education, low skills and above all injustice, would remain. Redistribution destroys wealth in one place, but only rarely creates it in another.

As Amos sees so clearly, it is injustice that perpetuates poverty, by preventing wealth-creation. The Peruvian economist Hernando de Soto is a latter-day Amos. His book on the mystery of capital explains with convincing clarity how abuse of property rights by the powerful and corrupt prevents the poorest people in the world—subsistence farmers and slum-dwellers—from getting onto the first rung of the wealth-creating ladder. When you have no tradable title to your property, you can’t use it as collateral for a loan; you can’t turn it into money if you want to move. You are also unlikely to invest in it: what is the point when a corrupt official or a powerful neighbour can come and take it away. In short, thanks to injustice, you are stuck.

The same applies to enforceable contracts. Without clean quick cheap courts, the crucial promises that are the foundation of business life and wealth-creation mean little. Without enforceable contracts there is little to stop the rich and powerful ripping off the poor and weak. Debts are uncollectable; assets unprotectable. The huge advantages of credit and bulk buying that businesses in the west take for granted are all but impossible.

The lawless environment of the developing world would have been instantly recognised by Amos. He railed against “corruption in the gate”. The gates, those days, were the law-courts—but the gate has another meanting too. You had to pass through the gate to bring goods to market. And the poor and powerless were at the mercy of corruption there too. Small businesses in the developing world face just the same regime from port officials, tax inspectors and policemen today.

Amos also attacks the way in which the rules of religious holidays are used to put the poor at a disadvantage, and he condemns those who fiddle weights and measures to cheat the poor.

Hear this, you that trample on the needy,
and bring to ruin the poor of the land,
saying, “When will the new moon be over
so that we may sell grain;
and the sabbath, so that we may offer wheat for sale?
We will make the ephah small and the shekel great,
and practice deceit with false balances,

The glory of technology and capitalism means that a cheap and accurate pair of scales is now affordable even to the poorest trader in a developing country. But fiddling with the value of money still goes on. Inflation and non-convertible currencies are another, grossly unjust, tax on the poor. For the rich and powerful, it is no problem to keep their money in hard currencies and foreign bank accounts. For the weak and poor, the lack of a safe way to save is yet another burden.

There are more injustices. Even when a third-world business has managed to accumulate capital, find workers with the necessary skills, develop a product or service that adds value and creates wealth—what do they find? That the doors of the richest markets in the world are closed to them. Protectionism is the ultimate institutionalised selfishness of the rich and lazy against the poor and hard-working. In the gates of the rich world, the poor are turned away in a manner that Amos would have found all too familiar.

The poverty lobby is to be commended for having, belatedly, grasped the importance of trade and the evils of rich-world protectionism. Christian Aid week will be a good opportunity to renew calls on the rich world to open the gates of trade.

But rich-world protectionism is only part of the problem. It is a tragedy that anti-poverty campaigners in the west have allowed themselves to be conned by the self-interested protectionist arguments of rich people in poor countries. Protecting the corrupt, incompetent and uncompetitive producers and providers of goods and services in poor countries levies yet another tax on people who are least able to pay.

The best way for poor countries to get rich is to trade more, not less, and poor people above all need the best goods and services at the lowest prices.

The good news, perhaps rather undercelebrated, is that since Amos’s day we have gained a much better idea of how wealth is created. It is quite wrong, as Nelson Mandela asserted last year in a speech of uncharacteristic foolishness, to say that “like slavery and apartheid, poverty is not natural. It is man-made”

On the contrary, poverty is all too natural. Poverty is where we all started. Barely an eye’s blink ago in evolutionary terms, having a nice flint axe and a dry cave was the summit of human material ambition.

Modern prosperity, by contrast, is not natural, but the result of specific institutions and habits. It is not just recent, but fragile—like water flowing downhill, wealth trickles away unless it is well husbanded. The good news is that we now know the principles of that husbandry. The bad news is that so many of us are too muddle-headed to preach them and practice them.

There is no example of a country where trade, competition, and the rule of law have not brought prosperity. Sadly, there are all too many examples on the other side: bad government, the favouring of elites, protectionism and monopoly all entrench poverty.

But perhaps the biggest lesson of the past decades is that there are no short cuts to prosperity. Much of the economic advice given to poor countries in recent years by the anti-poverty lobby has turned out to be tragically wrong-headed. Very rich countries may have the people and money necessary to run a big government. Poor countries certainly don’t. Rich countries can afford to squander money protecting treasured industries. In poor countries, state intervention in the economy has been a uniform disaster. Even in education, the uncomfortable truth is emerging, as research by James Tooley of Newcastle University shows, that for-profit private schools, even charging the tiniest fees, educate children far more effectively than the free ones run by the state.

These truths often seem very jarring to people in rich countries. It is not fashionable—putting it mildly—in polite Christian society, to celebrate the wondrous, glorious wealthcreating processes of global capitalism. The extraordinary way in which hundreds of millions of people have emerged from poverty in the past two decades thanks to the way in which India and China have embraced capitalism and global trade is lost amid worries about the ultimately secondary question of inequality, and perhaps even more so, amid a distaste for wealth.

Yet this should be as incomprehensible as a Christian distaste for the laws of physics.

The refusal to recognise the way wealth is created leads to a very damaging conflation of private generosity with public policy. The overwhelming lesson of five decades of third-world aid is that when aid money is paid from taxation, it takes money from poor people in rich countries and gives it to rich people in poor ones.

If Christian Aid week’s message goes beyond our own generosity to questions of public policy, it should be not a demand for redistribution. It should not be for headline-catching gimmicks. Instead it should match stern condemnation of injustice in the rich and poor worlds alike, with enthusiastic support for faster growth in the world economy—and particularly of the developing world’s share in global trade.

But that will mean shedding the foppish disdain that many in the rich world show for the causes of their own good fortune. In particular, many Christians’ political and economic outlook is riddled with guilt and sentimentality. Rather than grapple with the real causes of both wealth and poverty, it is so much easier to follow the feelgood route of trivial or counterproductive gestures.

Amos had something to say about that too. In a world riddled with corruption, he denounced the way in which rich people avoided dealing with injustice by offering conspicuous public sacrifices instead.

Even though you offer me your burnt-offerings and grain-offerings,
I will not accept them;
and the offerings of your fatted animals
I will not look upon

In the name of the Father, the Son and the Holy Ghost, Amen

Leading article on Poland

Poland's new government

The trouble with Poland

May 11th 2006
From The Economist print edition

A country that thrives despite its governments

Reuters

SEEN one way, Poland is a dreadful example of how central Europe is going wrong. The largest post-communist country in the European Union has remarkably high unemployment (18%), a remarkably bad system of public administration and some remarkably odd politicians.

Some of the time Poland has been governed by suave but sleazy ex-communists. At other times—including now—it is run by prickly, eccentric anti-communists. The biggest ruling party, Law and Justice, has decidedly rum notions. It loathes gays, feminists and the secular liberal order that most of Europe equates with modernity. On foreign policy, the party's sentimental attachment to America is matched by a visceral loathing of both Germany and Russia (recently the defence minister, Radek Sikorski, likened a German-Russian gas pipeline that Poland opposes to the Nazi-Soviet pact of 1939).

The government formed last weekend is even odder than the minority conservative administration of the past six months. Law and Justice has brought in two populist parties, the left-wing Self-Defence, and the right-wing League of Polish Families. In most European countries, such outfits would be on the fringes, not at the centre of power. Both parties have thuggish streaks, dodgy connections and peculiar ideas about politics and economics (until recently, Self-Defence wanted to cure unemployment by splurging the central bank's foreign-currency reserves). All this seems dismal to Poland's EU partners, who want a calm neighbour that plays by the rules. Instead they see a cranky, unpredictable country that reeks of backwardness; its cut-rate workers destabilise domestic labour markets; its bureaucrats can't implement the EU's rules; and its leaders make sensible decision-making impossible.

Yet as our survey this week argues, this picture of Poland is misleading. The main story of the past 15 years is of stunning success and modernisation. Poland's booming service industries are unrecognisable compared with the exhausted rust-belt country of 1989. Exports are soaring. Economic growth, running at 5% or so, puts old Europe to shame. Even the emigration of a million-odd Poles has its upside. It is better to wash dishes in London than to be jobless at home. Many Poles abroad are learning new skills, languages and attitudes that will stand them in good stead when they return, as most do. Freedom of movement inside the EU means that, unlike previous generations, most Poles are not emigrating for ever.

Nor is Poland's foreign policy as objectionable as some aver. Like its Baltic neighbours, Poland has reason to be suspicious of Russia, over both its aggressive energy policy and its baleful influence in Belarus and elsewhere. Poland is certainly increasingly assertive within the EU—but hardly more so than Spain, a comparably big country. The idea that new EU members from central Europe should be eternally grateful suppliants in the corridors of Brussels is patronising and unrealistic.

Even the latest coalition government may be less bad than it seems, for all the opprobrium deservedly heaped on its smaller parties. The prime minister, Kazimierz Marcinkiewicz, has confounded critics by making his minority government both effective and popular. Reforms in state administration—particularly the legal system—are proceeding apace. Armed with a parliamentary majority, his government could do still more. And it may be better to have populists of left and right tied down within the government than sniping from outside.

But this is still only a second-best outcome. Best would be a coalition that united Law and Justice with the country's other centre-right party, the more liberal-minded Civic Platform. It is baffling that two parties which share so much history and have such similar views are now at odds thanks to personality clashes. Mr Marcinkiewicz and his colleagues in Law and Justice should give their new coalition a chance. But if the populist parties start demanding more than cosmetic changes to economic or foreign policy, they should be thrown overboard without further ado. Poland has done well despite its bad governments. It could do even better with a good one.

Survey of Poland: Chapter One

Cheer up

May 11th 2006
From The Economist print edition

Reuters

Poles and outsiders alike are too gloomy. Despite the country's fractious politics, its prospects are bright and its problems solvable, writes Edward Lucas

WARSAW airport immediately strikes the visitor as oddly cramped for something that seems so modern. That is because travel, like so many other things in Poland, is booming. A new airport building opened in 1992, replacing the ghastly concrete slum built by the communist central planners who ran Poland until 1989. The new building was designed to handle an ambitious 3.5m passengers a year. Last year it handled 7m, and this summer a new $225m terminal will open, raising capacity to 10m. Other Polish airports too are expanding at a cracking pace. The one at Katowice had just 16 passengers in 1991. In 1995 it had 15,000 and last year 1m.

Poland has become modern and prosperous on a scale that some still find surprising. Warsaw bristles with skyscrapers, and most of Poland is online. At the airport, three wireless internet networks compete for travellers' laptops. Across the road is a Marriott hotel, bustling with young, middle-class Poles in-between flights and business meetings, fiddling with their BlackBerries and chatting on their mobile phones.

But foreign travel is not a pastime only for Poland's rich. In another part of the airport, a large concrete barn known as the “Etudia” terminal is packed with Poles going to and from work abroad. Some are in suits; for Polish companies, low-cost travel is a boon, enabling them to do business abroad much more cheaply. But many of these passengers are the sort of people that you would not find in the Marriott. The older and more tired-looking ones are probably heading abroad for casual jobs in agriculture, construction or domestic service. At least such work brings in more money than similar drudgery at home.

The numbers working abroad are huge, even for a country with nearly 40m people. Since 2004, some 200,000 Poles have gone to Ireland, and probably over half a million to Britain. The main reason is that there are few jobs at home, especially for the young and the unskilled. General unemployment is running at 18% and youth unemployment at a shameful 40%, partly because of a demographic bulge, but also because Poland's hefty pension and social charges make its labour expensive. For a couple with two children, this tax “wedge” is 42%, the third-highest in the industrialised world. Only half the working-age population is active in the labour market (see chart 1).

Migration and unemployment are big topics in the Polish media, which are by far the best of any post-communist country. Three heavyweight dailies, a zingy tabloid and three serious colour newsweeklies are on sale at every news-stand. But some news-stands are better than others. The state-owned chain, Ruch, offers cluttered layout, dim lighting and languid, even snarling service. Its main competitor, Relay, is much more user-friendly. That is because its smiling staff are the owners and employees of tiny businesses that rent the premises from the owner of the brand and use family labour—teenage children, spouses and parents—to avoid the job-killing tax and social charges. The Polish business environment may be full of obstacles, but the country's entrepreneurs are amazingly good at circumventing them.

Travel from the airport is revealing too. Rich Poles are met in limos; slightly poorer ones collect their cars from the hotel car park; the unwary take overpriced taxis, having failed to find the regular sort on offer round the corner. The poorest travel in the draughty, slow, old, dirty and pickpocket-infested bus that grinds its way to the city centre.

The best bits of Poland are now indistinguishable from their counterparts anywhere else in the world; the worst bits, including public services such as transport, are egregiously bad. Politicians, so far, have done little to dent that. “The Polish emerging market works much better than the Polish emerging democracy,” says Grzegorz Kolodko, a former finance minister now based at one of Warsaw's top business schools.

As you inch into town, cast an eye on the concrete-panelled fences to right and left, and the vast tracts of former military land behind them. Those on the right have been sold off cheaply in murky circumstances under past governments: a good example of how bad public administration in the past has cheated the taxpayer, disillusioned voters and perhaps enriched crooks. On the left, behind a display of decaying tanks and rusty fighter planes, is the huge 60-hectare Zwirki site, centred on a shabby 1970s concrete conference building where the Warsaw Pact's generals once deliberated. That would be worth perhaps $100m if the government were to sell it simply as land. But the defence ministry is looking for a different, more lucrative sort of deal in which it would share in the profits from any development. That sort of deal would have been unthinkable when Poland's military property agency was run by bureaucrats. But now the agency is headed by a forceful retired Anglo-Polish investment banker, Maciej Olex-Szczytowski, who has moved to Warsaw to work, pro bono, for the new government, to help it live up to its motto: “Cheap and efficient”.

Open for business

“European quality, Polish prices, Czech VAT.” The sign captures Polish capitalism in a nutshell. Marek Glinkowski's doors and windows business is based in Poland, but as close to its customers in the Czech Republic as is physically possible, in the last building before the bridge over the river Olza that links the Polish city of Cieszyn with its suburb of Tesin in the Czech Republic. Mr Glinkowski's firm epitomises the way Polish businesses are now attacking the newly opened markets of neighbouring countries—which is one reason for the leap in Poland's exports from $61 billion in 2003 to $95 billion last year.

Until Poland joined the European Union in May 2004, Cieszyn, known in Habsburg days as “Little Vienna”, was a pretty but rather depressed town on Poland's periphery, isolated from the rest of the country by bad roads and from the rest of Europe by the border. Getting goods across the bridge was difficult because of complicated paperwork and unpredictable queues. Mr Glinkowski says his business, founded in August 2004, simply would not have been possible before entry into the EU. Thanks to Poland's big domestic market, doors and windows there are 10-15% cheaper than in the neighbouring Czech Republic. Mr Glinkowski now has a sales force of four based in the Czech Republic, and 12 Polish craftsmen who drive over the border to install the windows.

For small firms such as Mr Glinkowski's, Poland's entry into the EU has transformed the business environment. Instead of being isolated behind customs barriers, they can sell their wares anywhere. Mr Glinkowski's biggest problem now is Poland's own bureaucracy, particularly as regards taxes. The tax rates are not much higher than those of its post-communist neighbours, but their administration is hugely more bureaucratic. Whereas the Czech tax authorities deal with his value-added tax in just 60 days, in Poland getting VAT refunded on exports takes around six months. And tax is only one of myriad administrative problems.

These are not just the usual entrepreneur's whinges. In the World Bank's latest comparison of the business environment in different countries, Poland comes 54th, behind such places as Kuwait, Tonga and Armenia. It is beaten by all its post-communist competitors in central Europe, except stodgy Slovenia. The cost of setting up a firm, for example, equals 22% of GDP per person, against an average of 13% in the post-communist region as a whole. In Poland an everyday business project—building a warehouse—involves 25 bureaucratic procedures and takes 322 days, compared with 21 procedures taking 252 days elsewhere in the region (and a lightning 70 days in America).

A half-hour drive to the north it is the same story, of success and frustration, but on a larger scale. Mokate, a privately held company with 1,000 employees and sales of 300m zloty, is Poland's best-known producer of prepared drinks. Some are strikingly, even piratically, similar to international brands of coffee; others are inventive to the point of oddness. The main product line is foil-packed cappuccino powder (flavours include vanilla and almond). Then there are teabags, regular, flavoured and even one spiked with a patented form of powdered alcohol to produce a mulled wine of sorts. Post-communist consumers are lively experimenters.

Mokate is a third-generation family firm. When its pre-war restaurants and shops were nationalised under communism, the Mokrysz family started up a private building-supplies firm, which survived even though the company claims it suffered from “persecution”. Certainly Mokate has done remarkably well since 1990, increasing its sales more than fiftyfold in 15 years after moving from cement in sacks to coffee-creamer in sachets. EU membership has greatly boosted its exports and the firm now sells to 55 countries.

Whereas Mr Glinkowski's success is based on a low-cost, low-tech product, Mokate's edge is in high technology and know-how. Its ultra-modern powder tower rises like a skyscraper over a gleaming white R&D facility, looking slightly out of place in the impoverished countryside around it, where a decrepit coal mine, now closed, used to be the main employer. Food scientists produce a stream of new consumer products.

But even though the ingredients of the two firms' success are different, Mokate's spokesman, Jerzy Chrystowski, is just as frustrated with the government as is Mr Glinkowski. “We just want the rules to stay the same,” he moans. “They are always changing: VAT, corporation tax, excise duty. One day all our vendors, even tiny roadside stalls, had to buy cash registers. Now they are told it's not necessary after all. And everything is overformalised and slow. The procedures are too rigid.”

That is the big challenge facing Poland, and the central subject of this survey. The country's private sector is increasingly able to compete with the rest of the world, whereas the public sector, wasteful, expensive and bloody-minded, is not. That is one reason why up to a million Poles are now working abroad. But this migration, symptomatic of Poland's problems, also holds the key to their solution.

Poland survey chapter 2: Politics

The accidental government

May 11th 2006
From The Economist print edition

Poland's present rulers are very different from all their predecessors

IF YOU listen to the chatter of the Warsaw media elite, you might think that Poland's centre-right government, in office as a minority administration since last November and as a majority coalition since last week, was the worst the country had ever seen. That is a demanding standard: since the collapse of communism, Poland has had strong governments and honest governments, but never both.

AP

The Lech and Jaroslaw show

Polish political parties lack the deep roots and mass memberships of their western European counterparts. They are fluid coalitions with blurred profiles. Confusingly, the ex-communists are now the most ardent capitalists and the ex-dissidents often sound authoritarian. A new generation of bright, honest, ideas-driven politicians is coming along, but as yet few of them are in power.

Although the communists were almost obliterated in the 1989 elections, their successor party has held power for all but 30-odd months since then, either as part of a coalition or in the form of Alexander Kwasniewski, the communist-era sports chief who served as president from 1995 until last year. But by last autumn the ex-communists' lingering grip on power had been destroyed by scandals. In the September elections to the 460-member lower house of parliament, the Sejm, the Democratic Left Alliance lost 161 seats; its share of the vote fell to just 11.3%.

However, the new government led by the centre-right Law and Justice party, now in unwieldy alliance with two populist parties, Self-Defence and the League of Polish Families, has also provoked plenty of criticism. Law and Justice is full of ex-dissidents, tetchy, righteous and unpredictable. The normally level-headed Wojciech Olejniczak, who leads the ex-communist party, compares Law and Justice to the regime of Alyaksandr Lukashenka in neighbouring Belarus. Donald Tusk, the leader of the main opposition Civic Platform, says the government is trying to “seize absolute power”.

That does not seem to bother Poland's new bosses. Law and Justice, and particularly its populist allies, delight in picking fights with gays, feminists, secularists, liberals, the media, ex-communists, uppity foreigners (especially in Brussels) and anyone else who crosses their path. The new leadership is avowedly Catholic: most senior figures have crucifixes in their office and appear frequently on Radio Maryja, an ultra-Catholic station much disliked by more mainstream members of the church hierarchy, not least for its anti-Semitism.

The man everybody likes to hate most is the leader of the Law and Justice party, Jaroslaw Kaczynski. If his twin brother, Lech, had not won the presidential election, the party's victory in the parliamentary election would have made Jaroslaw the prime minister. But he reckoned that it might look odd for Poland's two top jobs to be held by identical twins.

So now Lech occupies the presidential palace and his brother Jaroslaw sits in the Sejm, keeping a beady eye on the government. When he disapproves of a draft law, he produces his own. The government usually gets the message. There is not much discussion at cabinet meetings. “Instructions come out of a black box,” says one participant. The Kaczynski brothers are in the box. Most ministers are outside it. Top appointments seem to be Jaroslaw Kaczynski's responsibility too. When the treasury minister (responsible for privatisation) resigned, the prime minister, Kazimierz Marcinkiewicz, wanted a liberal-minded cross-party replacement. Instead he got a hardline economic nationalist.

The party chief makes frequent, vehement interventions in both parliament and the media. He has denounced the head of the central bank, Leszek Balcerowicz, demanding an investigation into his record, and is setting up a powerful new body to oversee the banking system. That has shocked those who see Mr Balcerowicz as a heroic figure in the country's recent economic history. As finance minister in the early 1990s, he pioneered the monetary stringency and free prices that, his fans say, kick-started Polish capitalism. The central bank is a bastion of economic orthodoxy and has run a tight monetary policy to make up for what it sees as the spendthrift habits of the politicians.

The media have also incurred Jaroslaw Kaczynski's displeasure. “There are no free media in Poland,” he controversially declared earlier this year. He wanted a special commission to examine links between journalists and the security services. His main target is what he calls the “lying elite” or the “establishment”—a mixture of shady businesspeople, semi-retired spies and their hangers-on in the media.

Weird and wonderful

His commitment to Poland's membership of the European Union has sometimes been questioned, and the new government's handling of foreign affairs has looked inept. Law and Justice, and particularly the Kaczynski brothers, hold ardently pro-American views, matched by loathing of both Russia and Germany. This goes back quite a while. In the early 1990s, after a lengthy lecture by Jaroslaw Kaczynski on German wickedness, an exasperated Helmut Kohl, then Germany's chancellor, ordered him out of his office in Bonn and told an aide: “Don't let that man within gunshot of this building again.” Mr Kaczynski says he was surprised at his treatment: he had just been “speaking plainly”.

Things do not seem to have changed much, judging by a recent interview given by Lech Kaczynski to one of France's best-known television journalists, Vincent Hervouët, at the Polish embassy in Paris. To start with, Mr Kaczynski kept his interviewer waiting for four hours. When he did surface, he took offence at Mr Hervouët's failure to rise from his seat, and answered the questions while staring at his shoes. Next, Mr Hervouët snapped at an aide who tried to hurry the interview along—at which point Mr Kaczynski ejected his guests from what he said was Polish territory. The interview, mercifully, was not broadcast.

Oddly, such behaviour goes down well with some Poles, who like to see their leaders putting snooty foreigners in their place. But outsiders are less charmed. Diplomats and foreign business representatives in Warsaw trade stories of spectacular scheduling mishaps and outbreaks of pomposity over protocol. A dinner for foreign ambassadors is cancelled at short notice, rescheduled, cancelled again at even shorter notice and suddenly switched to a different venue. Senior figures promise to appear but never show up; requests for meetings go unanswered. “There's a limit to the number of times I can remind them that they are meant to be visiting us soon,” says a sympathetic but exasperated ambassador to Warsaw of another post-communist country. Another foreigner, with many years' experience of dealing with Poland, is blunter: “They are amazingly arrogant and amazingly ignorant.”

Some of this does no real harm: a diplomatic dinner here or there or nowhere is not the end of the world. But sometimes lack of co-operation costs real money. Poland's agriculture minister, Krzysztof Jurgiel, simply refused to take part in a recent round of European negotiations over sugar beet. When he learnt what his European colleagues had decided in his absence, he tried to invoke his country's veto, only to discover that the decision was subject to majority voting. Many of the civil servants who would have known better have been booted out.

All this confusion reflects a big difference between the current and the previous political elite. Poland's present rulers are remarkably insular. Only two senior ministers speak fluent English. A top government adviser admits: “These people are mostly not very interested in foreign affairs. They don't speak languages, they don't travel abroad. They just don't care.”

In fact, they do care about some things. For instance, the government had an ambitious plan for European energy security: an “energy NATO” in which each member country would guarantee the energy supplies of the others in an emergency. But the idea was poorly launched and got nowhere: a pity, because Poland's dependence on Russian energy, particularly gas, is a big long-term problem.

According to the critics, the government is either sinister or pathetic. It understands nothing of foreign policy or economics, is obsessed with the grudges of the past and pursues only its own bizarre, confrontational agenda. But have the critics got it right?

Who would have thought it?

In trying to understand what is going on, it is worth recalling that nobody, least of all its own members, expected this government to gain power last autumn. In the run-up to the elections, the polls suggested that the Kaczynskis' Law and Justice party would be the minority partner in a coalition government led by the more liberal-minded conservatives of Civic Platform. This is a party that oozes familiarity with both foreign affairs and economics and appeals to the winners of the post-communist era: the Europhile, pro-business middle classes who think that the country is on the right course and just needs tweaking. By contrast, Law and Justice's populism attracts the poor but patriotic who feel that the past 15 years have been grubby, harsh and disappointing.

That promised the best possible outcome: Poland's first strong, sensible government in its post-communist history. But post-election talks between the two parties ultimately failed. Law and Justice governed first on its own, and now with populist parties of right and left.

One reason for the controversy over Law and Justice may be that the party has got some bad people rattled. Polish politics is dirty, and Jaroslaw Kaczynski and his government are, for the first time in the country's democratic history, making a real effort to clean it up. For all the criticism levelled against the government, there is no evidence of any personal greed or corruption on the part of Law and Justice. “These people are living in the same grotty flats with the same grotty wives and drive the same grotty cars as they were 15 years ago,” says one acute observer of Polish politics. “Compare that with the mansions, Mercedes and mistresses that their political opponents manage to afford on their official salaries.”

Raw honesty is a refreshing change in Polish politics; and it is arguable that neither Jaroslaw Kaczynski nor his government deserve the ridicule heaped on them. For a start, Poland is a strongly Roman Catholic country, where polls show clear support for socially conservative values. Regarding homosexuality, abortion and euthanasia as sinful may strike liberal-minded city-dwellers (and many foreigners) as wrong-headed. But it is not scandalous in itself that conservative Catholic politicians should represent their voters' values. Despite its dire image abroad, the government is well liked at home.

In particular, Mr Marcinkiewicz is one of the most popular politicians the country has had for years. One of his government's big achievements, he thinks, is its progress on breaking with the sleaze and cronyism of the past. “We have been very tough on bad behaviour,” he says. The government's first treasury minister was fired soon after his appointment for a financial peccadillo that in former times would have attracted little notice.

The best illustration, though, was the government's response to a newspaper stunt. The daily tabloid Fakt telephoned the agriculture minister, Mr Jurgiel, with a message supposedly from a close friend, Father Tadeusz Rydzyk, the head of Radio Maryja, claiming that his car had broken down. Could the minister send his official car? Eager to oblige his influential media ally, Mr Jurgiel ordered his driver to pick up the stranded cleric. Waiting photographers gleefully took pictures of the official limousine on its abortive mission. Mr Marcinkiewicz (though himself close to Radio Maryja) publicly rebuked Mr Jurgiel and ordered him to pay compensation for misusing state property.

The biggest clouds over that squeaky-clean image come from the new coalition partners. Self-Defence has murky business and other connections; the League of Polish Families' youth wing is anti-Semitic and homophobic. The League's leader, Roman Giertych, is now a deputy prime minister with responsibility for education. Andrzej Lepper, the leader of Self-Defence, has also been made a deputy prime minister, with overall responsibility for agriculture and rural development. Though he now sounds more moderate, his past statements on economic policy and Europe have been outlandish.

Still, on some issues of substance, Law and Justice has had good reason to behave as it did. For example, Mr Balcerowicz, the embattled central-bank governor, appeared to be provoking a confrontation. Where the government has tripped up so far, it seems to have been mainly from inexperience rather than malevolence. The double act of Jaroslaw Kaczynski and Mr Marcinkiewicz arguably works quite well: one stirs things up and plays politics, the other calms them down so that the business of government can go on.

The Kaczynskis' robust and sometimes ill-informed approach to European institutions is strikingly different from that of their ex-communist predecessors, who seemed intuitively to understand how things worked and how to make themselves look good in the eyes of powerful outsiders. Asked about EU competition policy, Jaroslaw Kaczynski makes a straightforward case for protectionism: “I would rather have the EU rules paying more attention to the situation of people who for 50 years didn't have a chance of normal development and should have some privileges now.”

But Mr Marcinkiewicz, in his only big international test so far, at the EU's summit in Brussels last December, proved a canny negotiator, winning Poland a deal worth about euro90 billion ($109 billion) over the next seven years. He is also making progress on reforming the remarkably incompetent way in which Poland spends that money. Polish foreign policy may be crudely cast, but it is not as mad as some make out.

The old enemy

Lastly, it is not surprising that Poland's new rulers are twitchy about the people who dominated the country's politics for so long. Jaroslaw Kaczynski uses the image of a bridge table, where the four players are businesspeople, spooks/bureaucrats, gangsters and politicians, all engaged in games against the public interest. That, at least in the mind of Mr Kaczynski and his advisers, is pretty much the way things are in Poland. He likes to talk of the uklad—a sinister, all-encompassing structure which has, in effect, stolen the country during the past 15 years. Where outsiders see the triumph of capitalism and democracy, Poland's current government sees a calamitous surrender to the former communists and their collaborators, and moral bankruptcy. What the communists lost in 1989, they have regained since. Every institution is contaminated: the judicial system, the civil service, the banks, the state-owned industries and particularly the intelligence services (see article). This government's job is to clean house.

Sometimes that mission justifies a bit of hyperbole. Mr Kaczynski's notorious remark about “no free media in Poland”, he says mildly, was an exaggeration to make a point. “If I had said that some media are not always fully free, nobody would have noticed. But the mass media are very one-sided.” He brushes off the suggestion that Poland should be proud of its press. “It is the product of a crippled economy and a crippled democracy.”

Critics say that Mr Kaczynski and his party colleagues may believe in democracy and tolerance in theory, but in practice they are deeply, perhaps even obsessively, convinced of their own rightness and the wickedness of others. That is a big disadvantage if you are trying to build strong, clean, independent institutions. There is certainly plenty of tidying up to do in Poland's public administration; the danger is that dysfunctional old institutions will give way to dysfunctional new ones as sleazy old communists are replaced by new zealots and coalition kooks.