Polish Industry and Industrial Policy in the period 1926-1929

Abstract

The advantageous business cycle conditions that prevailed in the global economy in the years 1926-29 affected Poland as well, where they were evident for a somewhat shorter time. The economic recovery caused the expansion of the domestic market for industrial goods, thanks to the improved situation in agriculture, increased employment, expanded inflow of foreign capital, and finally increased investments (both private and public). There was an increase in both the number of industrial plants and the number of employed, although they were unevenly distributed among various branches. It should be underlined that production growth recorded in the period was higher than the increase in the number of production plants – resulting in expanding production per plant. The structure of industrial employment also changed. In certain branches (such as mining, metallurgy and textiles), the share of employment in total industrial employment declined. The declining employment observed in the mining and metallurgy sector was paralleled by the growing number of workers engaged in the manufacturing sector. However, instead of narrowing, the disproportions in the industrialization of individual regions of the country actually widened. The most advanced level of development could be observed in the main industrial centers of Upper Silesia and in the central provinces of the country. However, the industrialization processes did not arrive in the most backward areas of Eastern Poland. The government's industrial policy pursued in the analyzed period was basically a liberal one, but in view of the level of the country’s economic development, weakness of private capital, and for reasons of national security the Polish government could not withdraw from direct participation in economic life and the role of the state expanded.