What is the social marketplace economy?

Professor Grzegorz W. We are talking about why the Labour Council Act does not fulfil its function, what the social marketplace economy is and whether social justice can be effectively combined with economical efficiency.

Rafał Górski: On 7 April 2026 we will celebrate the 20th anniversary of the passing of the Act on informing and consulting employees, i.e. the alleged Act on the Boards of Workers. 1 of the objectives of this Act is to advance a culture of dialog between the board of directors and employees organised in the form of a staff council to jointly guarantee both the position, the company's competitiveness and the good working conditions of the employed. Unfortunately, the bill doesn't work. Why do the heads of Polish companies not see a chance to strengthen their businesses?

Prof. Grzegorz Kolodko: I am not sentimental, but since you mentioned the anniversary, next year besides next April falls on the 37th anniversary of signing the circular Table Agreements. That is the term: the agreement is highly important. dialog is conducted to scope an agreement. The spirit of dialogue, the request for agreement between employees and employers was already visible at the circular Table, but it had to take respective years to take legal form.

You're asking why this bill doesn't work?

I have a more general reflection here: why and why compose it in legislation? Well, the Constitution of the Republic states that Poland functions on the basis of the social marketplace economy, that the essence of management is the social marketplace economy. To decently interpret this provision, we request to answer very hard questions: What is social dialogue? What is an agreement between employees and employers? What is simply a social marketplace economy?

Several years ago, the Constitutional Court discussed how to interpret meaning, the essence, the foundation of the social marketplace economy. After all, the Constitutional Court is from deciding, in case of doubt, whether a given law is consistent with the spirit of the Constitution. I was not an active politician at the time, only the most average prof. of science, and I was invited by the president of the Court to a certain intellectual challenge: I was to point out an example of a bill that contradicts the thought of a social marketplace economy, but was not challenged by the Constitutional Court.

The answer to the question of what is contrary to the social marketplace economy is very complicated, there are many doubts.

One should consider whether there is simply a sense of creating laws, which are later most frequently not executed due to the fact that it is not known how to interpret them.

Let's imagine a black comedy script that there's any law-abiding worker in the workplace who considers all decision of the boss to be against the bill. That would be absurd. so

Only what is deep, substantive, political and social knowing and knowing should be recorded in the Act.

Unfortunately, I have doubts whether that was the case in the case of the Staff Councils Act. That is why I am not so terribly amazed that the rules of conduct which should consequence from the Act are not implemented.

But is the culture of dialog even needed in companies? Why is this specified a immense challenge for Polish bosses?

Of course, a culture of dialog is needed due to the fact that in companies we interact not only with machines, but mainly with people.

In my opinion, more as a humanist than an economist, it is very crucial that people know what they are doing and why. People almost always know what to do at work, but they don't necessarily know why to do something.

If a man is just specified a cog in a machine, he may not realize why he goes to those 8 hours to work.

Before I got into college, I worked as a individual on a tunnel under Gdańsk Central Station. I know the taste of physical work, and I can assure you that construction workers know why they do something, see the effects of their work. However, with the production tapes since the Ford tape, since the taylorism prevailed in the production process, it is not so clear. [Taylorism is an American method of organizing work, which consists in dividing work into simpler activities, optimizing time and motivating employees through a strategy of bonuses and penalties – ed.]. This is why individual workplaces request to be distinguished. There are companies where the nature of production or the provision of services requires a much greater amount of dialog between management and employees, and they are those where this can be minimized or ignored at all.

Otherwise, you work on a production tape, on which cars with complex technology are mounted, or you collect in strawberry fields. With simple physical work, we deal with a somewhat different relation between employees – employers and those who engage others in specified work, should all the more talk to them, share the goal they seek. specified dialog makes those who work feel like coworkers, not just employees. From this point of view, the wise boss should besides be afraid that people realize why they should follow instructions.

Of course, this cannot relieve employees of discipline, the workplace should not change into a discussion forum.

Discipline and execution must apply, but erstwhile people are explained why they are to follow the orders of managers, social cohesion is strengthened, which is simply a self-serving goal, but economical efficiency is increased above all.

Professor Krzysztof Obłoj in his book “Passion and discipline of strategy” advises Polish managers to invitation employees to strategical discussions, discuss with them the strategy of the company or the challenges facing it, while stressing that the work and burden of the decision rests on the shoulders of the chief.

The Management Board by definition manages: either on behalf of its owners or on its own, erstwhile the manager is besides the owner or co-owner. The managers are liable for achieving the nonsubjective of maximising the capital involved. If they say they're working from morning to evening to make their customers, employees, suppliers, or the tax, it's just a marketing technique.

Management is simply a skill based on knowledge, but it is besides a certain skill, a certain art.

It is essential to associate in the most effective way the physical capital (machines, equipment, natural materials, materials, tools) with the financial capital. You gotta buy and then sale in a profitable way to stay on the market, and the marketplace is always competitive and sometimes highly competitive. Competitiveness is simply a good side of the marketplace economy due to the fact that it forces efforts to improve efficiency.

The key component in the assembly of these factors of production is the man with his skills, qualifications, cognition and commitment. I am an economist, first of all I remember that management concerns efficiency, rationality, profitability. However, I draw attention to the humanistic aspect of economics, I would call myself an economist with a certain social attraction.

When we have 2 companies operating in identical conditions, it will be more effective for a company where the crew is more emotionally, culturally, spiritually active in the production process or in the provision of services.

The crew should realize what is happening in the company and why, and realize it erstwhile there is more dialog between employees and the board.

This is good for both sides, due to the fact that if the company is more efficient, the owner performs his goal function better, maximising the rate of profit from the capital involved, and the employees receive a satisfactory remuneration and can supply themselves with an adequate standard of living. Here you can make any synergy, but you always gotta consider differenttia specificaBecause it's different in a company where you know what you're doing, or you know what you're doing erstwhile you gotta pull your employees in.

Today, I read on the BBC website a comment on how the Chinese economy is adapting to current challenges, to competition, or, more specifically, to the commercial war waged during Trump 2.0's presidency. A photograph illustrating the article depicts a Chinese individual sitting at the sewing machine. I imagined the life of that girl who gets up at the light dawn, drives an hr or even a meaning longer, and then does a hard and monotonous occupation for hours. This is simply a large effort and employers should talk to specified people and someway appreciate their efforts.

By listening to media discussions of experts, journalists, politicians or businessmen, I must say that the value of human capital, the value of workers, is small. This is on the margins of public debate. What does that come from?

Polish public dialog can be dominated in economical themes by a trend coloured with neoliberalism, which objects workers besides much alternatively of empowering them.

Even our Polish language diminishes the function of the worker due to the fact that we inactive hear the terms: employers and employees. (I am besides a individual due to the fact that I am a mercenary labour force employed at the otherwise excellent Leon Kozminski Academy.) The another side, i.e. capitalists, owners, entrepreneurs, managers, co-owners, shareholders, is called employers. It sounds a small like employers are doing individual a favour due to the fact that they're giving people jobs. Of course, they hire people, but not to give distant jobs. They do so to combine this human capital with material, financial and their knowledge, which they have as professional managers, to maximize profit.

The second element, which consists of a deficiency of appreciation of employees in Poland, is – in my opinion – the breakdown, diversification and, in any cases, the conflict of trade union movement in Poland.

I have experience gained in the times of 4 different governments (premieres: Pawlak, Oleksi, Cimoszewicz, Miller) and I have always been very commended for the dialog with representatives of the planet of work, mainly with trade unions. Sometimes, however, I avoided trade union structures and chose the workplaces that I then visited, and sometimes received attractive invitations and just utilized them. I've spoken not only to you or to the president, but mostly to people. I asked them what they thought, how they interpreted what was happening. These employees had quite a few insights relating not so much to the operation of the company itself, but to the wider environment: how the state operates, what the policy thinks, what the situation in Poland is. They spoke more about macroeconomic issues, which I am professionally closer than microeconomic ones. Similarly, the media discusses large issues: the world, security. Therefore, economics is besides discussed on a macro scale, while the micro scale is someway lost from sight at all.

During the last presidential election, if individual had followed all the candidates' statements, they wouldn't have heard besides much about labour affairs. For this, candidates have ready prescriptions for virtually all macroeconomic issue, due to the fact that politics deals with what happens on a macro scale, internationally.

Political forces should supply an appropriate framework for the functioning of public institutions of dialog between employees and employers.

The State should foster affirmative synergies, a combination of objectives that guide both the owners and the labour they employ.

Of course, the owner on the line – the worker has a conflict. We are active in a conflict from the micro level, even from a household business, which consists solely in the cooperation of spouses, to a transnational large corporation. We are always active in the conflict of 2 “I”. I compose more about it in my books, besides in the latest 1 – "Trump 2.0 Revolution of sick Reason".

One “I” is ideas and the another “I” is business. Ideas, these are the views or beliefs we have, the values we follow, the goals that guide us. As far as business is concerned, another interests have employers who would like to pay workers as small as possible and another employees who would like to gain as much as possible. The conflict of interest is obvious. The parties should be able to find a solution in a peaceful way, without requiring the usage of force in the form of strikes or demonstrations. If these solutions cannot be worked out, then the state should step in. And the state must then act as an arbiter, a conclusive conflict of interest between the employed and the employed, so that the economy functions calmly and efficiently and what is associated with it – to guarantee that society functions calmly and effectively.

The editor very rightly points out social cohesion. In my work I besides attach large importance to this issue, although I am an economist.

I stress: the point is that the economy is competitive, that companies are effective, but that there must be cohesion in society.

There cannot be a human being a wolf, there cannot be a constant conflict between the planet of capital and the planet of work, these conflicts should not become aflame due to the sometimes inept actions of politicians who cannot, do not want or have the courage to solve these problems properly.

In the article “The wider planet or the national wall?” published in “Rzeczpospolita” you will write: “The fact that Poland is only 41st in the planet in terms of economical competitiveness, remaining behind not only the most developed economies, but besides behind China, Saudi Arabia, Thailand, Indonesia, Kazakhstan and Lithuania is not the consequence of naive globalisation, but the weakening of national economical policies and shortcomings in business management.”

Our Poland has a lot to do in the sphere of social cohesion. It's not comforting that somewhere else is worse. I am always more motivated by the effort to scope those countries where social structures or regulations are better organised. And if we are to learn from someone, it is primarily from the Nordic systems: Denmark, Finland, Sweden, Norway, Iceland. No 1 has had specified good economical and social affairs in years.

A social marketplace economy is not built by 1 four-year parliamentary term. It's built over generations, even a full generation may not be enough. And unfortunately, our policy rides on this horse erstwhile in that direction, erstwhile in that direction: erstwhile an excess of populism, erstwhile an excess of neoliberalism, and inactive a shortage of social marketplace economy.

This is why both social cohesion, which is inactive unsatisfactory, and the competitiveness of the economy, which is besides unsatisfactory.

Poland lags behind Western European countries, Scandinavian countries and the USA, which is understandable for historical reasons. The amazing thing is that any of the Central Asian russian republics are ahead of us. It is crucial to consider whether that political class, in consultation with entrepreneurs, trade unions and workers, could have developed better organization solutions. This is an unpopular view, but possibly in the mentality of the inhabitants of the russian republics there has been any affirmative legacy after the economy of real socialism.

In conclusion, there is inactive a long road ahead and we request to discuss at different levels, form fresh habits and yet adopt any regulation of the Council of Ministers. I must stress one more time that erstwhile you compose something down in a bill, you gotta have a refined agreement. It is besides essential to have mechanisms for enforcing the provisions of the Act, otherwise it is demoralization. A political mistake, and a serious one, is the adoption of laws that are then not implemented.

In the book “Where the planet Goes. The political economy of the future," you wrote, "Departing from the heights of politics into pragmatic microeconomic ground, management is the most important". What would you advise management?

I don't do microeconomic consulting, but my opinion is that entrepreneurs should make certain their employees realize what they're doing and why they're doing the right thing in their company. It is crucial that workers, since they are not co-owners, are, however, co-executors of any deep conviction. The success of the entrepreneur is specified integration of the crew that they talk about the company: ours. Of course, the company inactive belongs to the owners, but employees begin to identify with it, identify with it.

Now there is simply quite a few talk about regulation in Poland, more specifically about deregulation, due to the fact that entrepreneurs would like there to be as fewer regulations as possible that hinder their activity. But be careful not to spill the baby with the bath.

Some government effectively restricts the freedom of business, but it is designed to guarantee that active entrepreneurs take into account not only their interests, but besides the interests of workers, suppliers, recipients, the environment, and at the end of the country to which certain taxation obligations are regulated.

The most crucial thing, however, is to make specified a culture, specified an component of culture, that – regardless of what organization will be in power – the discourse between the planet of work and the planet of capital is little conflict-ogenic, so that situations that endanger conflict do not turn into conflict, thanks to being resolved in the right way, in the right time. erstwhile again, Nordic solutions are very informative in these matters.

As a social economist and economical policy – a theorist and erstwhile a practice – I am afraid that the current policy is frequently going astray, promises pears on willow. Today, even liberal or neoliberal formations are bidding for populist proposals, so as to buy the applause of employees. Workers are a immense group of voters, due to the fact that Poles and Poles are in the vast majority of people working. Of course, business people are besides people of work, frequently even it is that employees enter from the company, and managers, entrepreneurs sit for hours to watch over the business they run.

As the Institute of civilian Affairs, we encouraged left-wing parties to address the subject of worker councils. I was amazed to receive their deficiency of interest. In fact, the work topics are virtually not in the media. How can you comment?

I am inclined to share your judgement regarding the deficiency of interest in employment matters by politicians, but I would like to add immediately that reflection is not adequate to make the thesis. It is not always what we hear or read in the media about individual parties or politicians that faithfully render the programs they preach. The leftist parties may have spoken more about labour councils, but for any reason, these media, which can be seen and heard the most, have either been silent about it or simply broadcast to a wider public reception. By the way, this is an interesting question of why the media brings out such, alternatively than another topics. most likely depends on the individual views of the people who work in these media.

On the another hand, I would not be amazed if those candidates to whom the right-wing patch is attributed spoke more and more loudly about social issues than those to whom the character of left-wingness is attributed. This is in general a subject for a completely separate conversation or even for a large debate or even for sociological, political and economical research. We request to find what the left is present and what the right is. At times, right-wing parties, which are or even are heavy nationalist, populist, care more about workers' interests than left-wing parties. They surely pay more attention to social issues in their propaganda, including media bustle.

What can employees offer from each another to their boards to jointly strengthen the company's competitiveness?

Workers should deepen their knowledge, broaden their horizons, effort to realize more about what is happening in the production or service pitch in which they are employed. It is worth doing any comparative effort to see, read, and ask individual how something works elsewhere.

We people want everything was better than it is. You gotta ask yourself, if somewhere else is better, why? Comparing is the method of getting to the bottom of the matter. Whoever does not compare does not know or, in another words, who does compare, knows more. Comparison is simply a very teaching, very useful training method.

We're all trying to be rational. The rational 1 is who acts in his own favor, but first we request to know what is beneficial to us. We gotta ask, look for reliable, reliable sources of information, due to the fact that even if we think of something, it is inactive worth verifying. An employee, ba, even a investigation institute may not know everything, but the more we know, beyond our narrow specialization, the better.

It utilized to be said that the proletarians of all countries merge, and years later it turned out that the businessmen of all countries were more effective. In the workplace you gotta connect, you gotta remember that there is strength in unity.

The extremist weakening of union strength is 1 of the causes of this syndrome we are talking about. If trade unions were better organised, it would service a labour matter, not at the expense of business interests, but in affirmative synergies with them.

As an economist, this could besides improve the competitiveness of the Polish economy and at the same time strengthen, deepen social cohesion. Strategically, in the long term, the best solution is to coordinate this social cohesion with economical efficiency. This is demonstrated by the experience of the Nordic Social Democracy and is taught by the progressive trend in social sciences. I have fellow economists who say that social justice cannot be combined with economical efficiency, but, in my opinion, that is not true. You can connect these issues, you just request to know how, and even erstwhile you know how, you inactive gotta want. And to know and to want, these are the 2 large issues around which the discussion will proceed forever. This is never ending story.

Thank you so much for talking to me.