Early capitalism and social economy

Early capitalism and social economy

31.12.2014 Blog

I have just read an article by  Krzysztof Wittels entitled “The era of the social capital. Forgotten achievements of Warsaw enterprises 1864-1939” and published at the leading Polish portal on Social Economy. The article starts with words which struck me: “It sounds like heresy. And yet. Workers’ residential, credit unions, pensions, nurseries and schools for enterprises’ workers, sports clubs, reading rooms and theater circles had their origins in the era of” wild capitalism” before the first World War and during the interwar period in Poland”.  Krzysztof Wittels gives large number of examples of social responsibility of Polish capitalists and entrepreneurs in Warsaw in the era of quick industrialization, developing market economy and capitalism in Poland in years 1864-1939.

When I read this article, and especially the words about ‘the heresy’, my first thought about this kind of authors and  social activists was: My God, how ignorant and how naïve they are?  For them capitalism is always greedy, bloodthirsty, inhuman. When they are explained that capitalism has primarily a human face and  that the only social responsibility of business is to create profit, and that the market (the symbol of capitalism) is the most peaceful institution that came up with a man, they usually do not believe in it and are saying that all these kind of opinions are lies and heresies. But it is nice to see slowly changing mentality of  ‘socially sensitive activists’ and that they dare to publish those revealing to them truth about social programs of early capitalism. The article of Krzysztof Wittels was published at  one of the anti-market oriented portals. For us, the supporters of the free market and true market capitalism, these social features of capitalism are nothing new. These activists call that features heresy, and in a sense it’s like naming ‘economic miracle ‘of what happened after 1948 in Germany after the reforms and the introduction of a real market by Ludwig Erhard. In both cases this was no miracle or heresy, but simply a natural reaction of people (businesses and consumers) for healthy functioning of market mechanisms.

Using Krzysztof Wittels article, I will outline only two examples of the biggest and well known Warsaw enterprises, namely  Norblin Factory (probably the largest manufacturer of non-ferrous metals in Poland) and E. Wedel (confectionery company).  At the beginning of the twentieth century, “Norblin Factory”  took care of its employees and their families. The Factory maintained nursery for children, pay for school tuition for 100 children of its workers. In the factory existed also such institutions as: cash assistance and lending, savings bank, pension and health insurance, dispensary and a tiny infirmary with 4 beds, a physician and surgeon on duty (a nurse). The factory pension fund –  the first in the Polish Kingdom (created after 1815) – was established by the factory owners: the spouses Ludwik  and Jadwiga Norblin and Teodor and Augustyna Werner (including donated for the pensions and welfare of workers as well as for orphans of former employees by large sum of 85 thousand of rubles). The Norblin spouses posthumously donated for social purposes more than 200 thousand rubles, splitting them between different Warsaw organizations; moreover, Ludwik Norblin gave valuable collection of paintings to the Society for the Encouragement of Fine Arts (Towarzystwo Zachęty Sztuk Pięknych). NBH company founded Poland’s largest copper and brass mill in Osiny (today Glowno) near Lodz in 1920s. It is interesting that  they established also big workers residential, where more than 1,000 workers lived, they built also a chapel and the House of Culture, which serves the Glowno inhabitants even today.

The best social security conditions, among Warsaw enterprises before World War II, was provided by  E. Wedel company, led at that time by Dr. Jan Wedel, grandson of the founder chocolate business, Karol Ernest Wedel. Thanks to innovative sales ideas and successful technological investments it was the largest company in the confectionery industry in Poland. Concerning social programs the company conducted in the interwar period such institutions as: nursery school, kindergarten, clinic (with permanent team of doctors and nurses), choir and drama club, and the canteen, which seemed cheap-course dinners. Workers Sports Club Rywal, financed by the company, has such sections as: football, cycling, rowing, volleyball, wrestling, boxing and athletics. In Swider, on a private plot of Dr. Jan Wedel, a small resort was erected,  in which every weekend could use up to 40 employees. Next to the Jan Paderewski’s Park in Warsaw (now Skaryszewski Park) the company created allotments staff employee. Wages in the company remained at a high level, and at Christmas and Easter each employee received an extra week’s wages and additionally the packet of sweets for free. Jan Wedel every day bypassed all the departments in the factory, talk with the staff and meet with them to discuss their private matters in his office. At the end of the 1930s he was thinking about building a large housing estate for workers in areas not too far away from the factory. During the Nazi occupation Jan Wedel, himself a German by birth, not only did not sign the so-called volkslist, but supported the conspiratorial activities, supported financially impoverished artists in this period, ransomed by a “sweet bribes” of people arrested by the Gestapo. He saved many Jewish children destined to transport to the extermination camp, he sent food parcels to labor camps, etc.