Black Friday for freedom and rule of law in Poland

Marek Tatala // 12 December 2017

On 24 November in many places around the world shops and their customers celebrated “Black Friday”, with promotional sales and special offers. This tradition, initiated in the United States in the 1950s, has been present in Poland for some time as well. It is a great example of a positive sum game when buyers and sellers gain surplus through the market exchange.

Nevertheless, we also have many black days when bad, undesirable or turbulent events take place. In 1360 on “Black Monday” a huge hail storm struck and killed an estimated 1,000 soldiers in the army of Edward III during the Hundred Years’ War. “Black Tuesday” marks The Wall Street Crash of 1929. When we put “Black Wednesday” in Google the first record is 16th September 1992, when the UK Conservative government was forced to withdraw the pound sterling from the European Exchange Rate Mechanism. Many negative things happened on “Black Thursdays” like devastating fires in Victoria, Australia (1851), protests in the Polish city of Gdynia, when several protesters were killed by the army and militia forces controlled by the communist government (1970) or the collapse of the Moscow interbank credit market (1995). The list of bad things that happened on “Black Fridays” is also long.
Apart from promotional sales we should also remember 24 November 2017 as the “Black Friday” for economic freedom, civil liberties and rule of law in Poland, due to five decisions undertaken by the ruling majority in the Polish parliament.

Firstly, the Law and Justice and its allies accepted a ban on Sunday retail. The ban will be gradually introduced and apply on almost shops every Sunday by 2020. This is bad decision for consumers, employees and the retail sector. Consumers will lose their freedom of choice about when to do shopping and how to spend their time on Sundays. Some people may lose their work. A shop which is forced to reduce number of opening days may not employ the same number of workers. Finally, the new regulations have exemptions favorable to small, less productive shops. The ban will harm larger shops, supermarkets and shopping malls, reducing the entire retail sector’s productivity. Poles will continue to enjoy “Black Friday” once a year, but Polish consumers, unable do shopping when they need it, will also encounter many “Black Sundays” in the future.

Apart from restricting consumer choice, the ruling politicians decided to remove a cap on social security contributions for salaries above 1,500 euro per month. It will lead to higher burden for employees and employers. Theoretically, due to construction of the Polish defined contribution pension system, it can lead to higher future pensions. But what if some politicians in the future do not fulfill these political promises? The Polish Senate postponed the introduction of these changes until 2019. It will give some employees and companies time for readjustment (e.g. to convert a regular labor market contracts into a self-employment). It will also discourage highly skilled professionals to have regular labor law employment in Poland. After Britain voted for Brexit, ruling politicians hoped to encourage some of the London City employees and companies to move to Warsaw. As Bloomberg emphasized recently the removal of a cap on contributions is Poland’s new pitch to Brexiting bankers: “Pay Higher Taxes!”

During “Black Friday” the Polish parliament also decided to continue working on the amendments to the laws on the National Council of Judiciary and the Supreme Court. The first attempt to change this legal act led to a wave of protest in Poland over summer. “The model of the judiciary proposed by the ruling party resembles the model known from the past when the communist party of Poland controlled all the legislative, executive, and judiciary powers” – I said at the briefing organized in July by the U.S. Helsinki Commission. The amendments proposed by the President of Poland, who vetoed Law and Justice’s proposals in July, are not any better. As 28 NGOs, including Civil Development Forum (FOR), declared in November “none of the President’s proposals to date resolve any procedural or substantive weaknesses of the Polish judiciary. Quite the contrary. They pose a threat of destabilizing the administration of justice and isolating Poland in the European Union and in the international arena”. And as it was stated at the “Democracy On The Line” website by the representatives of organizations from Central and Eastern Europe “a lack of independence and accountability in key political institutions, including the judiciary, can lead to abuses of power and corruption, in turn posing risks to the economic health” which has also been emphasized by FOR‘s research.

On “Black Friday” the parliament also decided to continue working on the changes to the electoral system, scheduled to be implemented before the 2018 local elections. The ruling party’s proposal will increase the influence of politicians on the electoral commissions, enable gerrymandering in favor of the ruling party and lower chances of local committees by promoting a method of voting favorable for larger political parties. The Chairman of the National Electoral Commission has strongly criticized this bill. Detmar Doering from Friedrich Naumann Foundation is right that “in the next year’s local elections, the opposition could be severely disadvantaged”*.

Finally, the ruling party together with few other members of the parliament supported a ban on drinking alcohol in all public places. In 2015 I started a legal battle with the Warsaw police that led to the Supreme Court ruling in 2017 saying that the alcohol consumption is illegal only on streets, squares and parks but there are many public places where drinking alcohol (outside bars or restaurants) is possible, if not restricted by the local council. For example such places include river and lakesides, beaches, and forests. My legal success enabled many people, including tourists, to enjoy their drinks sitting by the river in Warsaw and some other places in Poland without risking a fine. The Law and Justice party decided to ban this kind of alcohol consumption. Moreover, the changes introduced on the 24th November will enable local councils to restrict hours in which alcohol can be sold and reduce  the overall number of permits to shops that can  sell alcohol. It may worsen Poland’s position in the future editions of the Nanny State Index.

While Poles were able to benefit from special offerings during “Black Friday”, the ruling party supported policies which will generate significant costs for taxpayers, worsen the business environment, weaken  the rule of law and restrict economic freedom and civil liberties. Guidon J. Tucker once wrote “no man’s life, liberty or property are safe while the legislature is in session”. This year’s “Black Friday” in Poland should be included to a list of black days in the history of the Polish politics.

* Some regulations mentioned by Mr. Doering have been removed from the ruling party’s proposals and some new have been added, since the publication of the original version of his article.

This article was completed on 7 December 2017 while Polish parliament was still working on some of the legal acts mentioned above.

EPICENTER publications and contributions from our member think tanks are designed to promote the discussion of economic issues and the role of markets in solving economic and social problems. As with all EPICENTER publications, the views expressed here are those of the author and not EPICENTER or its member think tanks (which have no corporate view).


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