Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d 1 Introduction The origins of this book lie in an undergraduate exchange to the University of Wrocław, Poland in 1994. Two incongruities have stayed with me since this visit. First, while sitting in lessons devoted to the study of why communism collapsed, Poland’s opposition to Soviet dominance and the heroic construction of a new free post-communist society, I could never quite escape the unsettling sensation that there was a contradiction in what I was hearing in class and the reality of the lived post-communist experience for the majority of Poles, whereby one form of domination (Soviet) had been exchanged for another (capitalism). Second, having grown up during the Cold War with its attendant images of Eastern Blocs and Iron Curtains, I had somehow expected Poland to be more different from the UK than it was. This unease crystallized as I returned from the central European periphery to the western European periphery, I was struck by how similar substantial aspects of British and Polish society were: appalling levels of investment in transport infrastructure, an expensive and inefficient health service, corruption, high and often concealed unemployment, social dislocation; and this was just the journey from London to Aberystwyth. It was not a case of how different Polish and British experiences of neoliberalism were, but of how alike. All had seemed so different five years earlier with the streets of Warsaw plastered with posters of Gary Cooper in w samo południe (High Noon) and the first free elections signalling the beginning of the collapse of Soviet-style state socialism. This dramatic unification of the divided continent was generally welcomed across Eastern Central Europe (ECE) as the states of the region embarked on reforms that introduced forms of liberal democracy and market economy. Politically, transition was fuelled by ideals of liberal democracy, freedom and civic society, while economic changes were accompanied by a widespread popular belief that the introduction of a market economy through the application of neoliberal Shock Therapy would lead to a rapid and straightforward closure of the wealth gap with the West (see Sachs 1993a). Over two decades on and the political economy of so-called ‘new’ Europe that has emerged, looks startlingly like the old, marked by growing economic, political and social fragmentation and dislocation (Smith 2002: 647). Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d 2 Introduction Intellectually, these experiences explain many of the central themes that the book explores. First, it aims to analyse and explain a specific phenomenon, the application of Shock Therapy (the rapid liberalization of prices, the withdrawal of state subsidies, trade liberalization, privatization of state owned enterprises and the internationalization of national economies), in the Polish transition to a market economy; second, to illustrate how the phenomenon of transition is linked to the process of neoliberalization; and third, to explore the political dimensions of neoliberalization. By neoliberalization I mean the market fundamentalism associated with the changing structures of capital, states and international relations evident in the global political economy since the 1970s; it is neither a unitary global regulatory structure, nor is it a shadowy cabal of policy makers and business people. Instead it is a set of processes that remain in train (hence neoliberalization) rather than some distinct teleological endpoint (neoliberalism). It is not just the application of Thatcherism or Reaganomics but the distinct project produced by historically situated social agents to maintain the governance of capital over labour as much through regulation as deregulation. Such changes constituted an important break with the post-war world and signalled the increasing subordination of national social forces to the requirements of globally mobile capital (Cox 1981) seeking to bring into being a new global order in which states individually and collectively maintain conditions for capital to remain hegemonic over labour. It is this subordination that has configured variegated forms of neoliberalization. This emerging form of predominantly economic constitutionalism is more than just a set of rules. It is mediated through an extensive range of social institutions and organizations.1 As I contend throughout the book, the specificities of Polish Shock Therapy and of ECE transition more generally, can only be understood as part of a broader exercise of neoliberal hegemony, both between and within states in the context of the transnationalization of the capitalist mode of production. I understand transnationalization as part of contemporary capitalism’s constitutive elements. As Mittelman persuasively argues: the familiar imagery of a core, semi-periphery, and periphery no longer applies to a new structure that envelopes both vertically integrated regional divisions of labour based on the distinctive comparative advantages of different locations, and horizontally diversified networks which extend their activities into neighbouring countries as part of corporate strategies of diversification and globalization. (Mittelman 1995: 273) There are three main aspects to these developments: first, the ‘economy’, with scales from the global to the workplace; second, the state, the national scale; and third, the socio-cultural scale, from the home to the locality. The transnational involves the ‘strategic action of key political and social actors’, with the transnational linkages transcending and subsuming both the national and Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d Introduction 3 international (van Apeldoorn 2002: 2, 48). This engenders ‘an increasingly transnational identity and outlook’ (ibid.: 2, also 157), coagulating at a ‘transnational level’ into a transnational capitalist class (ibid.: 29, 63). It is in the scalar relations across spaces, from the global to the workplace to the home, where fundamental forms of class, gender and racial power are configured (Macartney and Shields 2011), as the ‘political economic means of bounding and adjudicating rules and relations of capitalist competition and cooperation of sameness and difference’ across different spaces (Mitchell 2001: 149). Transnationalization is a social relation with a politics to its production, related to the reconstitution of capital in general. It is a set of economic strategies for states (also sub-state regions, global cities) to follow, encapsulating the different spaces of engagement necessary to translate the specific interests of capital into the general interest across a range of concrete social and political processes, strategies and struggles (Cox 1998: 4). In short, transition in a more general sense is a structural feature of contemporary world order that corresponds to the developing hegemony of an emerging transnational capitalist class. My aim here then is to document the specific phenomenon of transition as a significant aspect of a hegemonic project and, in contrast to much of the transition literature, give this a novel theoretical explanation. The research problem the book explores can be summarized in three fundamental questions: (1) why did Poland ‘choose’ to introduce Shock Therapy as the model of post-communist reform? Such a variant of a market economy is, to all intents, alien to the political, social, historical and geographical situation of Poland; (2) what can contextualizing transition in the broader context of the global political economy of neoliberalization tell us about the events and phenomena of transition?; and (3) by focusing on the impact of neoliberalization on Poland, what can the Polish experience of transition tell us about the processes of so-called globalization? Contextualizing post-communist transition The revolutions of 1989 redrew the geopolitical pattern of Europe, as the regimes of ‘really existing socialism’ dissolved. The end of the Cold War had appeared to open up an array of possibilities for mass movements, like the independent trade union Solidarność, that had striven for democratization and social change. But this period of change was also accompanied by political disruption and the restructuring, even collapse, of a number of national economies (Braithwaite et al. 2000; Christensen 1998; Milanovic 1998). Transition in ECE was legitimized through an appeal to the logic of neoliberal economics, translated into the self-evident logic of the three ‘-zatzijas’: privitizacija, liberalizacija and demokratizacija (privatization, liberalization and democratization). What was also clear was the high degree of convergence amongst Western governments and academics; and also among participants and activists in ECE about the straightforwardness of the Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d 4 Introduction transformation from one system to another (for one of the few treatments of this issue in International Relations (IR) see Cox, M. 1999, 2011). For the West, this signified the victory of capitalism over its sclerotic competitor (Stark 1996). In short, the disintegration of the Soviet bloc signalled the reintegration of the communist East back into the global capitalist fold. The literature on what we might euphemistically call the reintegration of ECE into the global economy has been dominated by neoliberal economics pre-occupied with policy prescription for market adjustment and progress in transition (Standing 2002). ECE reformers, with the zealous fervour of the convert, have enthusiastically appropriated this message (see Balcerowicz 1995 on Poland; Klaus 1996 on the Czech Republic). Since the mid-1990s the original formulation of transition has been criticized for its simplistic and teleological assumptions (World Bank 2002). The early capitalist triumphalism has been sobered by the pathologies of recession, slow recovery and corruption. An obsession with privatization has switched to include notions of state intervention as increasingly legitimate, although only in the most prudential sense of facilitating emergence of the market (Bandelj 2002). Other approaches rejecting the orthodox economism have since gained legitimacy when problems emerged. This more circumspect emphasis has been replicated in numerous publications from the multilateral financial institutions (inter alia annual reports since EBRD 2004; World Bank 2004b). There is a huge and still growing literature on transition; however, much of this literature remains to my mind remarkably narrow. The focus centred on endogenous factors and political economic processes rather than external, international, global, or as I explain later in the book, transnational factors. Much of the literature has come from the policy makers themselves and there is little attempt to theorize dimensions of transition beyond the direct application of policy. Theory matters in transition because of the need to go beyond appearances and the apparent given-ness or naturalness of so-called stylized facts of post-communist transition. The implicit theoretical grounding of vast swathes of this body of work is in economistic functionalist models. This literature is, despite its protestations to the contrary, value-laden and a product of implicit assumptions (see Fine 2002 for an excoriating critique). While I would doubt that any social science can be value free, it is the implicit assumptions that I attempt to uncover here. The notion of ‘transformation’ achieved greater purchase as other disciplines like anthropology, sociology, history and politics began to challenge the dominance of neoliberal economics.2 Theories that emphasized how the construction of the new ECE would be embedded in the old emerged, and also suggested that the endpoint of transition might be articulated as a number of possible models (most notably Murrell 1992; Stark and Bruszt 1998). I share many similar concerns with historical legacies, the impact of continuities from the past as much as change, and condemnation of the social costs of transition of this critical literature, and in many ways this book would sit neatly alongside many of these contributions to a critical Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d Introduction 5 ‘transitology’. But this book also departs from what has in effect become a new orthodoxy by engaging with one of the most salient, if often ignored, features of transition: that transition is occurring in the context of a contemporary capitalist world order marked by the deepening transnationalization of capital and the commodification of ever more aspects of social life (van der Pijl 1998: 16–25). The focus of the literature, as I expand on in Chapter 2, concentrates on internal, domestic pressures as key determinants of transition, whereas the argument set out here is that the transition in ECE is part of a much wider global restructuring process. As such the idea that somehow transition was completed with EU membership for the Accession 8 is a particular misnomer, as I illustrate in Chapter 5. Few orthodox studies endeavour to connect the concrete instances of policy making to broader historical processes, social structures and global political economy. Studying the application of transition should surely not be reduced to the rational choices made by the policy makers of transition? To do so condenses our analysis of transition to the assumption that social life flows from pre-configured subjectivities. Of course the internal machinations of the transition policy-making community are important, and much of this book is concerned with this level of analysis, but not exclusively to the detriment of other (subordinate) social forces. Individuals are grounded in social relations and material conditions that generate political and economic life. Therefore, transition is also generated by the historical and structural conditions that policy makers and governments are embedded in. As noted above, my aim throughout the book is to uncover those forces at work below the surface. I expand on this analysis and methodology in the next chapter but here I offer a preliminary discussion of the book’s central methodological considerations. Methodological considerations My objective in this book is a thorough examination of post-communist transition and the simultaneous open-ended enquiry into broader theoretical issues in which I argue the transition is embedded. This links a number of different disciplinary arenas integrating the empirical, analytical and theoretical. In the course of the book I engage with several bodies of literature; this has meant focusing on a number of key concerns – the state, class, power and ideology. What underpins my response to these different disciplines is the application of a critical International Political Economy and the metatheoretical framework of a Gramscian historical materialism. This enables me to combine disparate and contradictory elements of the social world into a dialectic, holistic and coherent picture. The methodology employed here is one of multi-causality to explain the social phenomena under investigation in an interactive sense rather than additive. The relationship between the processes of transition and globalization is recursive, in the sense that there is an internal relationship between the phenomenon to be explained – transition, and the process that it is embedded in – globalization. Therefore, the outcome of Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d 6 Introduction one process affects the process that caused it. The aetiology of transition is the historic process of the emergence of a global political economy, globalization for short. While simultaneously transition is a transnational practice that facilitates globalization, in particular the political dimensions of this, i.e. the emergence of transnationally oriented neoliberal class fractions (Cox 1992b). It is the political dimension of globalization that I focus on here, and transition is one of many phenomena that identify the politics of globalization, based notably on the following series of propositions. In moving from greater to lesser degrees of abstraction these are, first that globalization does not entail a simple, unilinear historical transformation from a ‘world’ of nation-states and their ‘inter-national’ relations, to one of a unified global society. It does, however, signal a distinct period in the history of capitalism, which has always been a tendentially global system: the global dimension or aspect of capitalism has become increasingly significant, and has taken on some distinctive, historically specific features which amount to what Hugo Radice terms the ‘global reconstitution of capitalism’ (Radice 2000). Like all significant social change, these processes remain fiercely contested and uneven in their extent and their consequences. Contestation centres on the basic social relations of production under capitalism, but as always it takes a wide variety of multi-scalar, multi-dimensional forms and is strongly influenced by distinct historically sedimented legacies in different territorial locations. In ECE this has centred on the reconstitution of liberal ideologies enshrining private property, competitiveness and electoral democracy. In a more concrete sense this appears in the everyday as the simultaneous struggle between market and state, between economics and politics, and between the national and the global. However, market and state are both institutional domains of social struggle which are closely intertwined; the separation of economics and politics is an ideological tool designed to deflect attention from the contradiction between the formal equality of citizens as economic actors and their real inequalities in society. One of the aims of the book is to contribute to the de-reification of seemingly neutral capitalist social relations (e.g. Gramsci 1971: 268) and the articulation of an alternative social order from the historical conjuncture. These social relations, in the sense of a coherent ensemble of institutions and practices within which we live our lives, are produced and reproduced simultaneously at many levels from the local to the global. This reproduction enables state managers to maintain the appearance of the autonomy of the state apparatus from narrowly defined specific class interests caught so compellingly in Gramsci’s notion of the historical bloc and indeed not too dissimilar from Ashley’s notion of ‘variable economism’ (Ashley 1983: 466). The dominant contemporary ideology of neoliberalism has been elaborated by ‘epistemic communities’ of lobbyists, politicians, bureaucrats, academics, journalists and others, but only took root in the historical context of growing structural inadequacies in the post-1945 model of global capitalism: ‘embedded liberalism’ and the welfare/warfare Keynesian or developmental nation-state (van der Pijl 1998; Radice 2008). Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d Introduction 7 At a more concrete level, the present phase of globalization entails significant changes in the scale, scope and content of social action in both markets and states. The emergence of the processes associated with so-called global governance since the collapse of communism has increasingly exposed the limitations enshrined in the post-1945 order, limitations which take the form of a crisis of national sovereignty, and subsequently exacerbated by the 2007 financial crisis. Among the diverse and often contradictory results of the emergence of global governance have been constitutional changes at the national level, such as regional devolution and the reordering of the relative power of ministries and/or branches of government, and forms of regional integration (van Apeldoorn 2000; Jessop 2006; Shields 2004). Nationally or regionally distinct institutions and practices appear to provide both obstacles and opportunities in increasingly disorderly economic, social and cultural relations. Adaptation, in areas such as labour relations, competitiveness, welfare and corporate governance, may not eliminate differences in the face of local or national ‘embeddedness’ and ‘path-dependence’, but increasingly there are common (global or regional) forces at work and a common direction of change (Radice 2000). Indeed, it is at least plausible to argue as a number of critical scholars have, that class forces are increasingly transnational in character (van Apeldoorn 2004; Bohle 2006; Radice 2000; Robinson 2001; Shields 2004). A ‘new spirit is abroad in the world’, signalling a turning point in world politics necessitating a break with the orientation and assumptions of current orthodox approaches within IR/IPE, that dissociate national from international politics and counterpose the state to supranational institutions (Cammack 2006b: 1). Despite an increasingly homogeneous formal governance framework, indicated in the necessity for states to ensure membership of intergovernmental bodies and adherence to their rules and norms, and despite the almost-universal national presence of electoral democracy and market-regulated consumption, the unequal distribution of wealth and power both within and between nations is staggering and arguably increasing. Argument of the book This book is therefore an inquiry into these processes herded under the umbrella concept of transnationalization, exploring these themes in the context of post-communist transition neoliberalization in ECE and in particular in Poland. I argue that post-communist transition can most profitably be understood through the concept of the transnationalization of the state whereby national policies and practices are adjusting to the exigencies of the global political economy with particular state apparatuses buttressing the changes in the spheres of production and finance. Poland, as the pioneer of neoliberal change in ECE, in the form of Shock Therapy, is indicative of wider changes in the political economy of other transition states, especially with the added pressures of EU enlargement. Transition is embedded in Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d 8 Introduction structural and historical conditions generated by ‘external’, transnational forces and trends. Change in ECE has predominately been explained as a ‘domestic’ process with few attempts made to contextualize the changes taking place in the region as part of neoliberalization. To remedy this, the book explores the restructuring of the Polish state, ostensibly since 1989, though a core contention of the book is that this process began much earlier than that, by connecting concrete instances of policy to broader historical processes, social structures and political economy. While some attempts have been made to explore how transnational processes themselves might limit the options open to ECE in articulating and promoting particular ideas and concepts for transition, and shaping the framework within which the transition is embedded, it is necessary to contextualize these changes in wider historical and structural processes rather than mechanically depict transition as the merely technical abandonment of the planned economy and the withdrawal of the state to promote market behaviour. The reality is of a high degree of state intervention in transition. Despite the collapse of Soviet-style state socialism, the role of the state has not necessarily diminished; instead the nature of state intervention has been transformed. It is precisely the content of this transformation that the book explores – rather than the withdrawal of the state in Poland – its neoliberal reconstitution in favour of transnational capital. Plan of the book The book begins with a critical assessment of the dominant approaches to theorizing the political economy of transition (neoliberal, evolutionary and institutionalist) and establishes the basis for an alternative approach based on the transnational dynamics of transition. Drawing on recent Gramscian scholarship, Chapter 2 provides a conceptual lens to understand transition by focusing on structural change, the social relations of production and the changing social forces engendered through transition. In Chapter 3 the book moves on to investigate whether or not we can track similar changes in the Polish political economy to those that have occurred in the global political economy since the late 1970s; in effect, investigating the lead up to the transnationalization of the Polish state. This outlines the historical legacies that contribute to the configuration of Polish neoliberalism, integration into the global economy through the mechanism of debt, and the coagulation of disparate strands of anti-communism into cohesive social forces that come to transition with a neoliberal agenda (Domański 2005; Eyal et al. 1998; Lane 2005b; Wedel 2001, 2003). It does so by tracing the rise of particular social forces shaped by the restructuring of social relations of production and the form of state in Poland. A series of important social shifts occurred to propel Poland towards a neoliberal strategy of capitalist accumulation with the failure of Soviet-style state socialism as a development project and the uncoupling of the social basis of Communist Party hegemony. Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d Introduction 9 It is social forces most intimately associated with transnational capital, irrespective of their party or social position, that are most successful in the struggle over competing reform strategies. I articulate these changes through Gramsci’s notion of passive revolution whereby gradually and organically, dominant classes forces reorient a state–society complex without recourse to ruptural change. These strategies eventually coalesce through material and ideological changes associated with a new openness to transnationalized circuits of capital. In examining the political and ideological agency of transnationally oriented social forces and the successful demobilization of labour, the chapter shows how an elite group mediated the interests of transnational capital in transition through the imposition of neoliberal discipline to eliminate state subsidies and soft credit. This was accomplished while playing a vital role in articulating and promoting a particular series of ideas and concepts for legitimizing ‘successful’ transition, thus setting the political agenda and shaping the transnational orientation of the discourse in which transition was embedded. Chapter 4 appraises the extent of transnational orientation in Poland through an evaluation of the level of transnationalization in the finance and production structures and the assumption of neoliberalism as the dominant economic paradigm. The chapter focuses on the (re)creation of property rights, and their locking-in through privatization and the attraction of foreign investment. This is realized in three interconnected examples: the role of transnational corporations and foreign direct investment (FDI); the scale of transnational corporate activities in the privatization of the Polish production system; and the reorientation of class relations towards the interests of transnational capital through the emergence of a new local middle class and its rapprochement with the old Soviet-era nomenklatura as an integral, if still junior, member of a transnational capitalist class. This should not be taken to mean that the book is about FDI or privatization. While the book is tangentially concerned with these processes it is directly focused on the historical emergence of neoliberalization in ECE and Poland. The chapter achieves this by utilizing the Sachs–Balcerowicz Plan as the key paradigmatic exemplar of ECE transition from homo sovieticus to homo oeconomicus. Such a focus on Sachs and Balcerowicz remains vital given Gramsci’s assertion that, such an abstraction is not at all ahistorical, and although it appears in the guise of mathematical formulations, it is nowhere near being of the same nature as mathematical abstractions. ‘Homo oeconomicus’ is the abstraction of the needs and economic operations of a given form of society, just as the ensemble of hypotheses put forward by the economists in the development of their scientific arguments is nothing other than the ensemble of premisses that underlie a given form of society. One could do something useful by systematically bringing together the ‘hypotheses’ of some great ‘pure’ economist … and correlating them so as to show that they are in fact the ‘description’ of a given form of society. (Gramsci 1995: 297–8) Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d 10 Introduction For this project, Balcerowicz and Sachs are the central pure economists. Up to this point I have addressed only in passing the compatibility of transition with EU integration/enlargement and how this is mediated at the national state level. What also remains necessary is to underscore the global– regional dimensions of capitalist developments in ECE, particularly in the context of EU integration and an explanation for ‘transition’ that offers a fruitful analysis of the specific forms of socio-political response to the construction of market economies. The impact of ‘Europeanization’ and transition in Poland is the outcome of neoliberal restructuring, initiated and supported by state actors, domestic and transnational social forces, and supranational actors with the ultimate goal to strengthen the EU’s competitiveness in an increasingly global economy (Meardi 2002). Chapter 5 contends, in contradistinction to the majority of literature, that the neoliberal basis of the earlier wave of transition has not been ameliorated by EU membership. Instead accession has further embedded a radical variant of neoliberalism consisting of the core of the EU market order, without the inclusionist features of the European project, in effect a highly selective form of Europeanization (Ost 2000). This is demonstrated by exploring class oriented responses to the social and economic problems that followed the failure of the ‘first wave’ components of transition – privatization and liberalization – to construct effective economic development. This failure, in tandem with EU enlargement, has configured another wave of transition reform with an emphasis on the formation of appropriate institutional contexts for corporate governance and human capital, with the core aspiration of building competitiveness in ECE following adoption of the Lisbon strategy in 2000. This committed the EU to being the world’s most dynamic and competitive economy by 2010, and has been transmitted into ECE through the interaction of domestic and transnational social forces. Chapter 6 focuses on countervailing responses engendered by the transnationalization process. This is incorporated into the analysis by investigating the social resistance to and consequences of neoliberalism and Europeanization. Right wing nationalist and xenophobic parties in Poland have emerged linked to those social forces hit hardest by transition, in particular agriculture, and an emergent petty bourgeois class (Greskovits 1998; Iankova 2002). For labour, evidence indicates vastly different standards emerging between Eastern and Western Europe on a whole raft of issues including working conditions, industrial relations, and welfare provision (Meardi 2002). Labour market flexibilization and welfare state restructuring, while apparent across the continent, have advanced further in the East. New and unusual alliances between social forces have emerged. Polish trade unions and EU employers’ organizations, for example, are both involved in forms of East– West harmonization, though for contradictory reasons. The chapter concludes by reflecting on the implications for resistance and counter-hegemonic potential following the 2007 re-establishment of a broad post-Solidarność two-party political system in the context of the ‘global financial crisis’. Template: Royal A, Font: , Date: 02/04/2012; 3B2 version: 9.1.470/W Unicode (Jun 2 2008) (APS_OT) Dir: P:/eProduction/WIP/9780415386692/dtp/9780415386692.3d Introduction 11 In the conclusion I reflect on the processes associated with transnationalization in the global political economy explored in the context of transition in ECE and Poland. My comments address the extent of transnationalization in Poland, ECE and the broader process of transnationalization occurring in the European political economy and the significance of this for the wider European and global political economies as well as for future world order. How will this new set of coalitional politics shape the future of transnationalization? In conclusion I offer three future possible scenarios: first, further Europeanization along the lines of the European social model; however, Europeanization through enlargement is configuring intensified inter- and intra-class tensions. Second, re-nationalization, as currently implied by the surfacing of disparate alliances between labour, capital and governments at the national level in the name of national competitiveness; or a third more likely option of deeper and wider neoliberalization as enlargement fails to foster social European neo-corporatist practices, but rather exaggerates cleavages and struggle between social forces over the future of the European political economy in the context of the current crisis. The story of post-communist transition is a journey from one crisis to another. 

Adopting an innovative Gramscian approach to post-communist transition, this book charts the rise to hegemony of neoliberal social forces. Using transition in Poland as a starting point, the author traces how those social forces most intimately associated with transnational capital successful in the struggle over competing reform strategies. Transition is broken down into three stages; the “first wave” illustrates how the rise of particular social forces shaped by global change gave rise to a neoliberal strategy of capitalism from the 1970s. It goes on to show how the political economy of Europeanization, associated with EU enlargement instilled a “second wave” of neoliberalisation. Finally, exploring recent populist and left wing alternatives in the context of the current financial crisis, the book outlines how counter-hegemonic struggle might oppose a “third wave” of neoliberalisation. The International Political Economy of Transition will be of interest to students and scholars of international political economy, post-communist studies and European politics. Stuart Shields teaches International Political Economy at the University of Manchester The International Political Economy of Transition This book explores how Eastern Europe’s post-communist transition can only be understood as part of a broader interrogation of neoliberal hegemony in the global political economy, and provides a detailed historical account of the emergence of neoliberalism in Eastern Central Europe. The International Political Economy of Transition Neoliberal hegemony and Eastern Central Europe’s transformation Stuart Shields Stuart Shields POLITICS / IPE / EUROPEAN POLITICS SERIES EDITORS: LOUISE AMOORE, JACQUELINE BEST, PAUL LANGLEY AND ANNA LEANDER. www.routledge.com Cover image: © Adam Przezak/Shutterstock RIPE ROUTLEDGE/RIPE STUDIES IN GLOBAL POLITICAL ECONOMY ROUTLEDGE/RIPE STUDIES IN GLOBAL POLITICAL ECONOMY