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May 8, 1958

I left Paris this morning at 8:45, having arisen at six, and I have often felt better. Paris never seemed so lovely as it was last night, and I postponed all but completely going to bed. It was a wonderful evening at the price of a poor morning.

My plane, a KLM Viscount, was in Amsterdam in a little more than an hour, and we circled the city before landing. The canals glistened in the sun.

At Amsterdam airport I received the news that although my reservations had been confirmed—as my ticket fortunately showed—I was not on the passenger list. Moreover the plane, a KLM Constellation non-stop to Warsaw, was full. There was hope that someone would fail to show up, and I was thus somewhat comforted until a few minutes before departure time I was told that everyone was on hand and I was off. I appealed to the manager, pointed out that I was travelling KLM because of its reliability, and pictured the reception committee that would be awaiting my arrival at Warsaw. (Drawing on my imagination, I said there might even be a press conference.) After a further delay and much negotiation, I was made a member of the crew and ascended to the crew compartment. We circled from Amsterdam around through Denmark to avoid the forbidden territory of East Germany, and my spirits were improved by a large whisky. We came into Warsaw low over the villages which in many places, as in French Canada, string out endlessly along the roads making a continuous line of houses. Behind each dwelling is a ribbon of land a mile or so long and as wide as the house.

At Warsaw I was welcomed warmly by a delegation from the University and the Polish Economic Society. An amiable and very good-looking girl customs guard said, "How are you? May I just glance at your currency declaration?" She then waved to a porter to pick up my bags and we were on our way to town.

The Warsaw airport is a shabby and dreary place even on a spring day.

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And the trip into the city is no improvement on that from Newark. Warsaw, the planners notwithstanding, suffers from a bad case of urban sprawl--the sprawl in this case taking the form of long blocks of apartments which stand around seemingly at random. The best are ungainly and the worst ugly, and the ugliness is heightened by the building material--to wit, poor or reconditioned brick. As one gets closer to town the war damage becomes evident, and in large areas it is still oppressive. One passes through the part of the city from which the Germans evacuated all of the population in the closing days of the occupation.

I am lodged at the Grand Hotel Orbis, a tourist hotel, which like everything else in Warsaw is still being completed. The rooms are small but adequate, furnished in Sears-Grand Rapids. Some supplied me with four nice tulips. Since state property is involved, there is an inventory of all the artifacts tacked on the cupboard door.

I had scarcely time for a bath when a professor from the University, who is also on the Planning Board, arrived along with a very able woman economist also from the University. They told me of the controversy going on over the question of centralization versus decentralization of the economy. This does not involve the issue of socialism--which, though it has been given up for agriculture, is not in debate elsewhere. Rather it is whether organization will be in accordance with a tight, centrally-formulated plan covering both investment and production decisions, or whether the state, while retaining control of investment, will allow market criteria to guide and test operating decisions. Both my visitors were ardent decentralizers. Presently my lady visitor observed that I was tired and then I had a couple of hours sleep. Thereafter I was met by two professors from the Polish Economic Society, and we walked through downtown Warsaw to a good dinner preceded by several rounds

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of vodka which I was encouraged to toss off at a single gulp.

Our dinner conversation ranged over a great number of subjects, but mostly it had to do with the state of the Polish economy. "Since October" recurred constantly in the conversation and refers to the retreat of the Stalinists and the re-emergence of Gomulka in October 1956. "Since October," in their view, the position of the peasants has improved as has the efficiency and productivity of Polish agriculture. But the position of the urban population has not improved--certainly not in accordance with expectations. There is more than a little frustration and discouragement. Much is blamed on the "bureaucracy"--on the conservatism and reluctance of the Party and the administrators in tackling needed reforms. "Our price system is idiotic," one of my hosts observed, "and nothing is being done about it." The other agreed, although he was less pessimistic about the prospects for change. Both agreed that the unhappy position of the urban workers and intellectuals had elements of danger. "The most articulate people are suffering most."

Incidentally, the vodka led to a discussion of alcoholism, which is serious. One of my hosts produced an interesting explanation. In an economy where consumers' goods are not plentiful, where private investment is difficult, and where savings have been repeatedly eroded by inflation, there are so few outlets for extra funds. But these can always be plowed into alcohol.

On the way home I asked were it not true that the standard of living in Poland was higher than in the Soviet Union. Both agreed that it was. I then asked why people talked/much about the Polish economic problem and so little about the Russian economic problem. My hosts agreed that it was an interesting question and also that the answer is easy. The Poles have learned to want a great deal more.

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May 9

Last night I inquired of the Orbis girl on my floor--she serves as translator and counsellor to the guests on the floor--where I might get some shirts washed. She told me to collect them, and this morning before I was up the phone rang and she was inquiring whether the maid might bring them in. There they were, sparkling white and cleaner than the Coop ever got them. I was reflecting on the relative efficiency of these two socialist laundry establishments when the Orbis girl explained that I should pay the chambermaid separately. The hotel laundry will not be operating for another two months, and meantime the maids are doing the laundry on their own time. It is Polish private enterprise that is better than Cambridge socialism.

Breakfast I had in the hotel dining room. It is a pleasant although vaguely conventional, slightly too-cushioned room. It was full of people all talking in whispers or low voices and in a rather conspiratorial way. Behind me three sinister-looking figures were whispering in English and I decided I would listen when I heard one of them say, "He has real courage. He wouldn't hesitate to get fired to help us." Unfortunately, they seemed to be discussing the chances of the chiropractors getting recognition from the regular medical practitioners in Cleveland, Ohio.

After breakfast I went for a long walk through downtown Warsaw to the Hotel Bristol and headquarters of Orbis where I changed some money. The downtown section of Warsaw has been largely rebuilt and in a rather severe style, emphasizing verticle lines and windows. It is much criticized-- indeed, last night one of my hosts pointed to some trees in a square and noted that they were a concession to the critics of "social realism" in architecture.

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The skyline of Warsaw is dominated by the Palace of Culture, a gift of the Soviet Union and a skyscraper of some thirty stories. It does not reflect the influence of "social realism," but is startlingly reminiscent of the Woolworth Building.

There is not much traffic on the streets, although the city has a lively aspect. A few of the women are smart in appearance; more are good-looking. But most of the women and all of the men look more than a trifle shabby. One gets the impression that clothes require a good deal of planning and improvisation. The shops are austere by western standards, although I saw some interesting-looking bookstores, and one department store had a large and lethal-looking inventory of red motorcycles. A pushcart peddler was selling two grades of red and yellow apples at Z10 and Z14 a kilo. At the tourist rate the sloty is about four cents. This would be twenty to twenty-five cents a pound.

On the way I noticed an old woman with a broom of sticks sweeping the streets, and I felt that I had established spiritual contact with the Slavic world. Having old women sweep the streets is certainly inferior to our system of not sweeping them at all.

After supplying myself with some money, I went to the Embassy where I chatted with Jacob Beam, our ambassador, and with John Wenmohs, the well-informed agricultural attaché. In the last year, or a little more, we have supplied the Poles with about 1.1 million tons of bread and feed grain. The Russians have supplied some 1.7 million tons. Perhaps Poland is not to be forever the victim of geography.

I lunched by myself at the Grand Hotel Orbis and not without difficulty persuaded the headwaiter that I would like a drink. The waiter brought me

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a small tumberful of vodka. It substantially quickens the perceptions.

At three I called by appointment on an old acquaintance who is now a high official in the Planning Ministry.¹ He seemed pleased with the book--Dorfman, Samuelson, and Solow on *Linear Programming*--that I brought him, and for a while we conversed amicably enough. He is working on long-range planning problems--problems beyond the present plan--and told me that in his view the rate of investment is limited not by the supply of savings but by the amount of such investment, and in particular of construction, that can be administered at any time. Beyond a certain point it is this which represents the ultimate bottleneck. I pressed him as to whether it was one which investment itself--i.e., in supervisory personnel--could break. He expressed doubts. Nor did he think decentralization was a remedy. The latter, he argued, was largely a function of the supply of resources. The more reassurance one has, the more one can decentralize administration and risk waste. The fewer the resources, the greater the need to control by centralized administration.

He told me that the present objective is to bring living standards in Poland up to the level of such Western European countries as Holland or Denmark by 1970. This is a high goal.

Thereafter our discussion deteriorated into an argument over the U. S. economy. He kept referring to the decisive role of arms expenditures. I pointed out that in relation to GNP, government spending was not so vastly greater than 1939 and that besides military outlays, state and local spending had risen rapidly. He refuted me with some recalculations of

¹Since the people with whom I talked had no reason to expect that I would quote them, I have used names only sparingly in this account.

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national income involving concepts which I could not follow. In the end I gave up.

After a tour to take pictures--nothing very good--I went to dinner with the leaders of the Polish Economic Society. On the way, my guide (a young vigorously anti-Stalinistic instructor) and I were caught in a violent thunderstorm. We took refuge in a coffee bar and presently, along with the noise of thunder, came the sound of bugles and drums. A parade of soldiers and some boy scouts came bravely along through the cloudburst.

"I think it may be some visiting delegation," said my guide hopefully. But it wasn't, and the drenched marchers disappeared in the downpour.

The dinner was good but I learned little, for they asked me questions--many about U.S. agriculture. In consequence, my normal tendency notwithstanding, I talked rather than listened.

There was some critical discussion of the economic plan. "We have advanced the theory of planning in recent years, but alas not the practice."

We walked home by the vast Party headquarters and discussed the curious duality of the Party and the Ministerial government. Some important ministers are not members of the United Workers' or Communist Party, yet they are obviously responsible for a large range of decisions. Where does their authority stop? Where does that of the Party begin? How much negotiation must precede any action? There seems no doubt that it is an awkward and time-consuming way of making decisions.

At various times today I encountered Calvin Hoover, George Backer, Sydney Gruson and wife, Douglass Cater and wife, and Joseph Harsch.

Another question of the evening: how much is the American economy dependent on arms? Did the Sputniks accelerate the arms race?

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May 10

This morning I was taken on a long tour of Warsaw. My guide was an intelligent young engineer who supplemented his earnings in this way. We saw the Belvidere Palace, the vast Soviet Embassy—a neo-classical structure on which my guide commented without enthusiasm—the great former royal park, and the old city. The central square in the latter, though completely destroyed, has been reconstructed in the original form. It is a great source of pride to everyone. The nearby cathedral is also being rebuilt by the government, although without some features added in the nineteenth century. Cathedral building in a Communist country sets in motion some interesting reflections.

Then we went to the site of the ghetto—this is an area northwest of the old city in which the Germans herded the Jewish population—some 400,000—and around which they built the famous wall. From here people were deported to the death camps until the hopeless uprising of 1943. Then they were burned and slaughtered *on site* and the whole area levelled. It is still a desert of weeds and rubble with—no doubt it was imagination—the smell of death still over it. The place has a most moving and horrible impact. Even in the sunshine of a bright spring morning it seemed altogether hideous.

I then went with my guide to the top of the Soviet-built Palace of Culture. It is not very impressive—heavy, unimaginative, ornate, and lacking in finish and elegance. However, the school children who were also visiting it were better pleased. My guide was also impressed. It is high. From the top there is an excellent view of Warsaw west of the Vistula and also of the still unredeemed devastation. My guide suggests that complete rebuilding will not be finished for another ten years.

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I went to lunch with the Beams, the party including Joe Harsch and wife and Flora Gruson. Very pleasant, and we talked about everyone's favorite subject, namely Poland, until mid-afternoon. These are days of almost breathless delicacy in the Polish position, with the government attempting to walk a thin line which avoids Titoist heresy on the one hand and a closed window westward on the other. The press has been severely limited in recent weeks. The universities remain relatively free for the moment and the secret police have not been reactivated following their suppression or severe restriction in 1956. The Church also remains relatively untroubled. All makes for endlessly interesting discussion, although like so much debate where foreign policy is disproportionate attention to concerned, there is a ~~disproportionate attention to~~ passing detail. In foreign policy it is always more interesting to discuss the tactics of the moment rather than the continuing strategy.

I slept and then joined Calvin Hoover and three Polish economists for tea. One of them, the professor of econometrics, was enchanted with a copy of Dorfman, Samuelson and Solow and kept leafing through its pages. He told us that since Gomulka econometrics, and especially linear programming, have been made legal in Poland. (Maybe the Stalinists had something.) I gave a copy of Mason's essays to another economist who works on the role of the state in the capitalist countries. She hurriedly glanced at it to assure herself that there were no similar symbols and then expressed her pleasure. Very sensible girl.

We then had a general discussion turning on this problem. Prior to Gomulka's coming to power the government and Party had claimed a steady rise in output and in consumers' goods. On taking power in 1956, Gomulka had said that this improvement, so far as the consumer was concerned, was fictitious. What had been the devices which had led to these initially misleading conclusions?

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While the question was not asked, the query was implicit as to whether the figures had been faked.

Two answers were suggested. First and most important, inventories were being accumulated rather than being passed on to the consumer. This accumulation was very high. And armament claims were also high and these, apparently, were included in the total of final goods. Secondly, the totals were swollen by goods of such low quality that they added nothing to living standards. They were unusable or unsalable but were in the statistics nonetheless. This observation confirms one made by Lange in 1956.

We then discussed whether an economy like that of Poland should adjust output and income by moving prices or wages. The Russians work on prices; the disposition of the Poles is to act on wages. It is a nice point. I should suppose that if output is growing the most nearly neutral step is to reduce prices. (Wage adjustments will always involve some alterations in the relative wage structure.) And I would assume that this step would be most conducive to saving. I imagine that it also involves difficulties where, as in Poland, the agriculture is not socialized.

We talked in the restaurant of the hotel, which was full of fairly well-dressed people who were having ice cream or tea and listening to Strauss waltzes and Hungarian songs.

A final note: the local economists were most anxious to have a draft of my lectures that it might be reproduced. Now I learn that they are not to be reproduced. I am anxious as to why.

May 11

Evidently it was one of finding a typist who could deal with English--"a formidable technical problem when faced." So be it.

Today was fascinating. At 9:30 I departed Warsaw to Lowicz some eighty kilometers to the west. I had as guides two agricultural experts, one a

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merry stump of a man with an enormous mustache of markedly piratical
inspiration. A young professor came along as a translator. My piratical
friend told me he was the man who, in pre-war Poland, helped introduce the
4-H Clubs. He inquired if they were still functioning in the United States.
I reassured him and told him they contributed their mite to our surplus.
He told me how, over peasant resistance, he had introduced fertilizer in the
villages where he had worked. He distributed fertilizer over the growing
fields in the form of a cross. When the priest was unable to explain the
miracle he stepped in. He asked me if I were a Catholic and seemed relieved
when I told him that I was not. He observed that Polish peasants were
perversely willing to spend more money on their salvation in the next world
than in this.

On the way we stopped to visit a seat of the Radzivill family, who
ruled Poland from the middle ages to the end of World War II (the last
Radzivill left with the Germans in 1945 and returned to be picked up by
the Russians. A brother is now in the foreign ministry.) It is an interesting
but not especially inviting chateau. The most interesting piece of
furniture is a harmonium made of tuned glass tumblers.

Next we went to church. On the road we had seen numerous people standing
outside the churches which our guide said were too crowded to accommodate
all clients. This one, of cathedral size, and gaily decorated for a wedding
in white flowers and ribbons, was overflowing. It was also a breath-taking
sight. The women were nearly all in local folk-costume with brilliant
white and rose scarves on their heads. The singing was even more sensational.
It was some sort of responsive hymn, and the sound rose and was reflected
from the high reaches of the Gothic arches. My young professor friend was

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also deeply impressed. He said that he had no idea such singing was to be heard anywhere in Poland. Nor do I expect to hear anything quite to match it again. It was clear, spirited, and in some unidentifiable way, magnificent.

My pirate friend took us into the church to snap a few pictures. He told me that, "as a fellow pagan," I could do the same. Alas, my "fellow pagan" got down on his knees and crossed himself adequately once he was inside. Then he took his pictures.

After the wedding I also took my pictures. It was one of my best days for National Geographic art since Kalempong—I hope.

Next we went to an agricultural school for lunch. The latter--tomato soup with sour cream, pork cutlets, potatoes, and cake--was very good. Next I said a few words to some of the students (boarding students of high school age) and then we went on to visit a village. This was the high spot of the day and we were guided by a growing body of villagers who finally took us to one of the larger houses for tea, beer, sausage, and cakes, and an hour or two of discussion.

The latter was exceedingly free and manifested a vigorous individualism: "We survived under the Czars, we survived under the Germans, we survived under the Stalinists, and we will continue to survive." I asked them if they were happy now and they replied that, on the whole, they were. Income is increasing, there is money to invest and building materials to buy;

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individual farmers have acquired six tractors in recent weeks.

This village was never collectivized, and the holdings were
always rather small. Accordingly, the land reform which here sets a
limit of sixteen hectares (about thirty acres) had had little effect.
However, my host had a few more acres than that and had been labelled
a Kulak. "Is that a name to call me; do I look like a dangerous man?
I was so angry I just sat in my house."

Now Kulaks are no more. There is still a machine and tractor station
in the vicinity, but the villagers do not use it. "You cannot get the
work done at the proper time." Fertilizer, which was long scarce, is
available in adequate quantity. The compulsory deliveries at less
than market prices plus the heavy land taxes--about $40.00 a hectare at
the tourist rate--are still a source of complaint. But I would gather
that, as compared with the Stalinist period, the mood is fairly favorable.
They told me that because of the relatively high cultural level of the
village there was no alcoholism. They

asked me if alcoholism was a problem in the farm villages of the United States.
I told them that while in the cities our people drank too much, in the country
it was the other way around.

Last year the Poles spent about 213 billion for alcohol, mostly vodka.
By comparison, the land taxes yielded only about 24 billion.

My questions frequently provoked long debates over answers, but it was a
merry party. They asked me the size of the farm on which I was born. When I
told them 150 acres, they said, "Oh! you were indeed kulak." When I slowed
down on the cake and sausages, my host said, "You must fulfill your plan."

On the way home we were stopped for speeding, and it developed that
our car did not have the required first-aid kit. But the driver told the
policeman that he had an "American professor" aboard. The cop stuck his head
in, looked me over, grinned, and waved us on. An excellent system.

Tonight I had dinner with Harold Linder, Calvin Hoover, and the
Douglass Caters. We talked, oddly enough, about Poland. The feeling of Americans about
Socialism seems much like that toward sex. There is fascination, a desire
to look, and if possible to touch, but no wish to become involved.

May 12

A further note or two on the visit to the villages and the agricultural
scene. In the late forties the government started an intensive collectivization
drive, and a fairly large proportion of the farms --around 25 per cent of the
arable land area--were forced into "cooperatives." In the new territories
to the west there were also a substantial number of state farms. Although the
collectives and the state farms were favored as to supplies and investment,

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results were most discouraging. Meanwhile, production on the remaining private farms, in the absence of an adequate supply of factors and under the impact of discriminatory taxation designed to force them into the collectives, was stagnant where it did not decline, and deliveries fell as the peasants ate more and more of what they produced.

Since October 1956 the situation has changed radically. Farmers were told they might leave the collectives, and four-fifths of those belonging departed forthwith. The discrimination in taxation, and especially in the supply of factors and funds to the private farmers, was dropped. Since 1956 farm output has been rising, and the new policy is regarded as at least one fruit of the Gosulka era that has proved itself.

The villages we visited yesterday had a tidy look of well-being. The older houses were of heavy timber with a deep, beautiful thatch. The more recent ones were mostly of brick. The farmyards were tidy and full of healthy-looking livestock. The cows, mostly Holsteins, were of good quality, and the calves showed the virtues of artificial insemination. However, these villages were better than the average, I am sure.

This morning I had my first lecture. It was not a resounding success. The audience at the outset was mostly of faculty members. After I was well started a bunch of students came rushing in as though in answer to a riot call. I cannot persuade myself that the lecture was widely understood. I am glad that I did not have to listen to it in Polish.

After the lecture I fell into conversation with a young professor who took part in the Boz uprising and who was seriously wounded fighting just outside the building where he now teaches. (The University is on the banks

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of the Vistula and was one of the centers of the conflict.) Although he
is not a party member and has lived in the West, he was not bitter about
the failure of the Russians to intervene. He thought they recognized that
the uprising was designed to anticipate them and was in degree directed
against them. Therefore, they had a right to keep their hands off. By
contrast, he was very critical of the romantic strategic concepts of the
London Foles who assumed that the uprising would give them power against the
Russians. No government so completely astride the Soviet lines of communication
could have appreciable autonomy at this time. He thought the Czechs had been
wiser. "They postponed their revolt until it was safe. The only damage in
Prague was to one mirror and two glass doors."

Until October 1956 he had been forced to conceal his participation in
the uprising because of the suspicion it incurred.

This afternoon I called at one of the ministries to give the Minister
a book and a letter of greetings from Haberler. The Minister was obviously
pleased and urged me to call back again. I must try to avoid giving him the
impression that Haberler is in accord with all aspects of Polish economic
policy.

Thereafter I cashed some cheques--Poland is not inexpensive--and then
went to look for a bookstore which is supposed to be exceptionally good.
I could not find it.

Mostly I reflected on the drabness of life. One gets the impression
that people put on a very brave front, but only as the result of infinite
effort. I looked into a toy shop which had the worst trinkets imaginable
at very high prices. There was a long queue before what I took to be a

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dram shop, although I am not sure. There are quite a few soldiers, mostly officers, on the streets, but they are not very noticeable, for many of the civilians wear a green-khaki coat that has the appearance of a uniform.

I think the main thing to be feared from planners like Harris is the colorless character of the society they would foist upon us! The people of Poland have more liberty than variety.

In the late afternoon I had a visit from a Polish novelist. He was anxious to know how and by whom I had been invited to Poland. Finally he blurted out: "Surely you are not a Marxist, are you?" I told him I wasn't but that I might be distinguished from some non-Marxists by a realization that Poland had certain problems of location to contend with. He nodded.

I had dinner tonight at the British Embassy. Afterwards we had a long talk about events since 1956. The British ambassador has good analytical sense and gave an able exposition of the recent history. He thinks that in recent months there has been a marked move in the direction of realignment with the Soviets. I asked him about an alternative hypothesis, namely, that the government is making the right noises on foreign policy while using its autonomy to get ahead with needed changes on the economic front. He thought this at least possible.

The Ambassador pointed out that the Poles are the only eastern bloc people with whom all questions—including questions of party strategy with party members—can be freely discussed. Others have made the same point. While the Ambassador is good, at least one member of his staff is a primeval idiot.

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May 13

A very long day. This morning I went to the Yugoslav Embassy for my visa. Like every other building in Warsaw, it is being built (or rebuilt). They had been duly advised by Belgrade, and my visa was issued forthwith--although I was courteously relieved of Z100 as a "tax." Then I went to the U. S. Embassy next door and picked up a parcel. The marine guard, clearly a lad of intelligence, was reading a copy of *American Capitalism*. I told him he would go far, even in the Marines. Then I went to visit the School of Planning and Statistics. It is two or three kilometers from the center of Warsaw in one of the less devastated parts of the city and is a huge establishment. (It dates from 1906 when, as the result of the Czarist concessions of that period, a school of economics, as it was then called, became possible.) Now the students number some thousands and the buildings--plain but light, airy, and more attractive than most--are huge. Most are of postwar construction or reconstruction. A main part of the curriculum is the training of plant managers--"the Harvard Business School of socialism," one professor observed. Economics, statistics, and foreign trade are among the other fields of specialization.

I visited the Rector, a fine scholar of the old school--he recently succeeded Oskar Lange--and the Pro-Rector, and made the school a present of a half dozen books. They were much pleased. Then we had coffee and discussed the students--they are uninterested in politics, marry before they can properly support a wife, and have more time for studies now that they are on state scholarships. Foreign trade, because of its prospect for overseas travel, is the most popular field. Business management is not especially popular,

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although it pays slightly better than other fields. One of the professors remarked that the pressure for a doctrinaire egalitarianism was much stronger in Poland than in Russia.

I toured the school and library in company of a succession of faculty members and ended up with a professor of business organization who, somewhat unpredictably, was also head of the school trade union. I asked him whom he bargained with on wages, and he replied: "Oh, all of that is centrally determined." I tried to get from him what the union did, but he was not very responsive. I fear he is no John L. Lewis.

He is, however, a most delightful man, and after showing me some fine first editions in the library--Hobbes and Condorcet among others--walked with me back to town. On the way we stopped at his apartment and had a vodka or two. He told me that only a Polish government which proclaims its independence of Germans and Russians can have the support of the people. Given a choice between Germans and Russians, he thinks the first are the most to be feared. He says the fear of war is a phobia in Poland and that Poland is the worst country in the world to govern because of its two hundred odd years of experience in resisting all government. He said he had difficulty understanding the difference between Democrats and Republicans, wanted to know if Stevenson would run again, and if I thought the case method was scientific. To the last I said no, and he said he agreed.

I had had very little breakfast, and with all of this I had barely time to get to the Polish Economic Society for tea and my lecture. This lecture, on countervailing power, went much better. Lange presided; the audience was much more mature and followed me closely. Afterward the questions lasted for

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an hour or more. The latter ranged from fairly straight Marxian dissent to sympathetic queries as to details. One perceptive scholar asked why more western economists did not accept so obviously sensible a resolution of the paradox of power instead of relying on competition. Lange brought me home, and I gave him my last copy of Dorfman, Samuelson, and Solow, which he wanted badly to see, and a carton of English cigarettes which I remembered his wife favored. Finally, about 9:30, I got my first legitimate meal of the day. Ham and eggs only.

Notes on the way of life. A bus ride costs about three cents at the tourist rate. The streets are so clean that in the moonlight they shine. The workmanship on the buildings is very poor—the woodwork is cheap, the floors are badly laid, and the masonry is poorly joined. During the war years the School of Economics, like all institutions of higher learning in Poland, was banned by the Germans. So it operated clandestinely as a secondary school. When the Germans inspected it, economics became commercial arts or bookkeeping. The degrees then granted were later affirmed.

## May 14

Today was a holiday at the University while it celebrated its 150th anniversary. I attended by invitation of the Rector, and the ceremonies began with formal introductions in the Palais Jean Casimir, the main building of the University. A large number of foreign visitors were on hand, and the array of academic robes and gowns was brilliant. As a kind of unattached visitor I was assigned a place, together with a visiting Indian and one or two other miscellaneous types, just behind the Pro-Rector of Peking, the Pro-Rector of Hamburg, and the representative of the University of Outer Mongolia.

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in the academic procession. The representative of Outer Mongolia had something of the academic aspect of Tony Galento. I thought he was worried about being photographed with me. The only American university officially represented was Columbia whose representative had been shipped over from Munich. He obviously felt very badly about not having academic attire or decoration--which had been specified in the invitation--so he had put his Phi Beta Kappa key in his buttonhole. He looked extremely silly.

The procession wound slowly through the University grounds to the auditorium, with many pauses en route. Hearing me speak English, the Chinese representative appealed to me for some language assistance. He is a Chicago-trained physicist and sent his regards to Cavers, Doty, and Edsell whom he met under the auspices of Cyrus Eaton.

The proceedings mostly escaped me. The Rector, who evidently had something to say about academic freedom and traditions, was vigorously applauded. The Minister of Public Instruction, a politician of the general appearance and build of the late Paul Dever, was accorded perfunctory applause. I got more of his speech, save some references to Marx and Lenin.

The crowd showed its political preferences in an interesting way when the various representatives were called to present their credentials. The winners, by far, were Paris and Peking, although the latter owed something to his fine appearance and to the fact that he presented a great silk banner as his greeting. Columbia and Moscow came together and won about the same reaction. There was a conspicuous coolness for the representative of the Karl Marx University of Leipzig.

The honorary degrees were distributed between East and West—Geneva, Oslo, Prague, etc.—and seemed to be non-political so far as I could tell.

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Eventually the proceedings palled, and during an intermission I slipped out. I had coffee with two women members of the faculty of economics, one of whom did her graduate work in Russia. She hopes soon to come to the U. S. We discussed why wage and income differentials are narrower in Poland than in the U. S. S. R. She thought it because Poland has a more self-conscious and politically sensitive labor force. It is her view that the differential should be much wider. The Russian professional salaries are well known in Poland. They are typically about ten times as high as Polish salaries.

For meals this hotel serves only ham and eggs, and I had my usual lunch of these and some vodka. Then I was picked up by the Austrian minister with whom I had a long talk at his legation. However, much of it was devoted to general European policy. He thinks the Polish prospect is fairly satisfactory.

At six we went together to the Palais Jean Casimir at the University to a reception given by the Rector. I saw a great many people that I knew--it is amazing how quickly one's acquaintances increase in a town of this size. The Rector of the University of Breslau pressed me very strongly to visit him. I met Mrs. Stanislaw Ossowski whose husband is this year at Harvard (Adams House G-12). Professor Schiller of Hamburg joined me, and later some Polish economists--from the University and Planning Board. I invited them all to dinner at the Bristol, and the party continued until midnight. We ranged over the problems of the U. S., West German, and Polish economies. One of the Polish economists and I had a long discussion of pragmatic approaches to socialist planning. He asked me how I would run Poland within a broadly socialist framework. I replied that I would keep agriculture private since both capitalist and socialist experience showed the difficulty of applying

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socialism to this sector. For large enterprises I argued that the critical question was managerial autonomy and not ownership. The state should, accordingly, be most concerned with how to grant autonomy to such enterprises. Such autonomy need not extend to investment aggregates.

Trade and small business, I suggested, should be the grounds for debate. However, I must say I have difficulty seeing the rationale for public ownership in this area. Few get rich; the market incentives obviously make people work hard. And if agriculture must be private, the acquisitive mentality, which will certainly exist here, will not be unique.

My friend was much interested. He said he thought Poland was moving toward some such formula. But first he noted--as everyone else does--that something must be done to get price and wage relatives straightened out.

I asked why the workers state treated the peasants well and the workers less well--a fact clearly shown by the statistics. He replied that this was "Marxism accommodated to practical necessity." In other words, the peasants occupy the position of strategic power in a country heavily dependent on their willingness to produce efficiently.

A very interesting evening. Schnappes and dinner (without wine) for five was about 2600, which is around $24 at the tourist rate.

One economist earlier in the day told me of a Polish airplane which kept losing its wings. Finally, a rabbi was consulted, and he told the designer to perforate the wing where it had been breaking off. This seemed like implausible advice, but the rabbi was influential. And his advice worked. The designer was sufficiently impressed to ask him how he knew. The rabbi replied, "Just look at our toilet paper. It never tears at the perforation."

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Technical note: The "accounting rate" of interest which is charged on investment ranges from seven to ten per cent. The rate for savings is very low -- two or three per cent. This economists believe should be much higher.

May 15

This morning I went to the Institute of Agricultural Economics where I had a long talk with officials. The head who was (I think) a Marxist gave me a stronger defense of the past aims of post war agricultural policy than any I have yet heard. However, it was far from being unqualified.

The cooperative or collectivization program, in his view, was not seen in its "organic setting." I gathered that this is another way of saying it was pressed too fast too hard. In the grain producing areas it worked better than on the livestock or mixed farms. It was also a desirable and in some respects a necessary policy where the property in question had formerly been a single large estate and hence had but one set of buildings. It worked better in the progressive west than in the less advanced east. A choice as to the type of collective was given to the peasant -- the range being from the holding of virtually all assets in common as in the U.S.S.R., to more limited types such as individual ownership of livestock and collective production of grain. The limited types worked better than the total collectives.

In the region of Poznan of about 1000 collectives, somewhere around a half survive. These were either former large estates or collectives which confined themselves to cooperative grain production. In Breslau district, where the production was more mixed and the collectives more comprehensive, the number dropped from 1000 to 75 in October 1956. In eastern areas the

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number of collectives was always relatively small.

I asked if the experiment could be considered over. He said the next step would come much more slowly and, in effect, on the basis of voluntary acceptance of the peasants. This will indeed be slow, I imagine.

He saw no great future for state farming. Most state farms, which are administered in groups of three to five, are in the new territories in the west. There is still a lack of enthusiasm for ownership in these areas.

There is a good deal of confusion in Polish agricultural thinking as the discussion this morning brought out. The importance of raising agricultural productivity is stressed. But there is also worry about the number of young people who are leaving the farms, and you hear it argued that peasant incomes must be good to keep people on the land. Everyone agrees that Polish agriculture is over-populated. These inconsistencies one on occasion encounters in a single conversation.

This afternoon I strolled through the shopping area. It has suddenly become very warm and a large crowd was out. There was a long queue at a stand where lemons were for sale. In a food store there were two other long queues -- one I think for freshly ground coffee although I couldn't see without being obvious. I went into the largest department store which was far from prepossessing. I was impressed by the energy with which people dashed up the escalators until I saw that this was necessary for they were not running. The merchandise looks wretchedly poor.

At four I was picked up by a professor and taken on a tour of the college of agriculture and some state farms. The main part of the college is in a suburb, and about a kilometer distant from it our tubercular car (a Polish model which everyone criticizes) finally expired. We continued on foot and

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looked at the institution, but I was unable to form any very satisfactory impression of its quality. Like everything else in Poland one is put off by the awful shabbiness. I don't really think it was very good.

Eventually our car was repaired and we visited two or three state farms -- a couple of them with very large commercial orchards. I thought them generally workmanlike and efficient in appearance but such conclusions are also of small value. All were ex-seats of ex-Polish nobility.

My host told me that graduates of the college all want city jobs; that Polish prospects were poor -- "we have to rebuild this country every twenty years which is discouraging;" and that while agricultural efficiency was increasing, policies had been and were still excessively doctrinaire.

Thus no satisfactory small tractor had been developed because, it was assumed, the machine and tractor stations would supply all the power and this could be in large units. Now, for the small farms, a small tractor is badly needed.

A terrific thunderstorm cut short our tour, and I returned to the hotel for dinner. My food habits are becoming a trifle monotonous. This hotel, pending completion of the kitchen, serves only ham and eggs as an entrée. I have had these whenever I have eaten here and, although excellent, the combinations are somewhat limited. However, tonight I found I could have weiner-type sausages. The vodka is extremely helpful.

**Further notes:** The only professor with an automobile is Lange who drives a black Buick. However, I imagine this is a perquisite of his position on the State Council. At the university celebrations Lange commented on the brilliance and variety of the academic dress in contrast with Chicago.

"You see the advantage of socialism when it has feudal traditions."

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May 16

This morning I chatted with the people at the Embassy and went for a long walk. For lunch, instead of ham and eggs, I had some vodka and a Pilsener beer. It was more interesting and seemed to be quite nutritious. Then I had a nice nap.

I lectured at six at the School of Planning and Statistics. On the way into the lecture I fell into conversation with two men, one of my age and one older, who spoke English with a marked American accent. Both were American Communists who had been deported to Poland -- one after forty years in the U. S. They seemed very homesick -- one said he was attending the lectures to hear an American voice. I felt sad.

The lecture was well attended and uneventful. Afterward I went to dinner at the journalists' club with a group of Polish economists. We talked about pricing problems. A new and "final" price reform is now under way which, it is hoped, will make it possible to accord increased control over production to the individual enterprise and to test performance by profits. Now, since some costs are in excess of prices at all levels of production, the best managers are those which make the biggest losses for they produce the most. In the past incentives have been based on output which leads to the waste of materials wrong and labor, xxxxxxxx product mixes, and other irrationalities. This reform will be principally of producers' prices. It will not affect consumers' goods prices greatly, for charges will be taken up by charges in the turnover tax.

John Michael Montias, a Yale economist who has written on price-setting and other problems in the Polish economy, is very favorably regarded by the Polish economists.

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I was asked if I had read the new book by Baran which is now being translated into Polish. I confessed that I had not. It was suggested that Baran had written very astutely about the nature of capitalist development. I indicated that there might be some opportunity for discussion here.

A story: In Russia no one can speak his mind except Khrushchev. In Poland everyone can speak his mind except Gomułka.

There was passing mention of the new Russian Sputnik and more of the French crisis.

After dinner at about eleven I was picked up by the Cruson's driver and paid them a visit for an hour or two. Now it is far past bed-time but thanks to my Churchill-type nap I am not very sleepy. I needed something to read today and found a cheap edition of Frank Norris' *The Octopus* from a Leipzig publisher. The jacket says it is an especially vivid account of the grinding tendencies of American capitalism. I would think it a little troublesome for the average local reader that the grindees are 10,000-acre wheat ranchers. Capitalists v. Kulaču! The jacket also explains, helpfully, that Norris' anarchistic leanings in the novel are an "error."

## May 17

This morning early, I packed one bag, met my escort from the Polish Economic Society and journeyed across the Vistula to the East Station. There we took a train to Lublin. The train, consisting of two classes, was crowded almost to Indian standards. On board I was met by a second escort, another charming woman, from the Catholic University. I was well managed.

The train made its way at a negligible rate across the countryside -- much of it scrubby pine and poplar but some of it rather pleasant farm land.

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The villages are thatched and an occasional house is painted a powder blue -- a sign, according to one of my guides, that it contains a marriageable daughter. Everywhere the apple and cherry trees were in blossom.

We got to Lublin about two and proceeded to the University which is just across the street from the large Party headquarters -- "vis-à-vis" as one of my guides said.

I was welcomed and given a nice lunch by the Father-Rector -- vodka, special Polish canapes, pork chops and red wine. I also learned that the University still feels a bit abused. Its social science faculty was closed in 1950 and permission has not yet been granted for reopening it -- although the effect, characteristically, is that the teaching continues under a different name. The parochial schools have been closed although religious, meaning Catholic, instruction is now permitted in the public schools. I noted that this went rather further than would be considered fitting in the U. S. and, indeed, than in all candor I would approve. The resulting effort to differentiate the situation of Catholic Poland from the secular U. S. was not very useful. I got the subject changed. My lecture was well attended but I fear that it was of no great interest or meaning to the majority.

The decline of competition cannot be of much interest to people who have never thought about competition before and never will again.

Dinner was at the flat -- very modest but very clean and civilized -- of one of the professors. Several younger members of the faculty came in, and the discussion turned on work abroad, the long delay in getting passports, and the poverty of the students and university. (The university is supported by four special contributions each year in the churches plus the gifts of

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friends.) It is the only Catholic institution of its kind in eastern Europe.

I came home early. We are housed in a fine, large nineteenth century hotel -- a pleasant and spacious change after the compact modern rooms of the Grand Hotel in Warsaw. There was a slight contretemps when we discovered they had, logically enough, made up two beds in the bedroom (one for myself and one for my guide) and none in the large living room which I occupy. Things were straightened out.

The police patrol in pairs here with slung rifles. There is a soft drink in Poland called Agricola.

## May 18

Sunday morning in Lublin. Bright sunshine, scrubbed children in Sunday best, breakfast of brown bread and coffee; at the next table three girls of the town who looked as though they had had busy night -- exceeding their norm; outside the public radio playing English songs.

Lublin is one of the oldest cities in Central Europe and after breakfast we were taken on a superior tour by a distinguished local architect. We visited the old Dominican church, the cathedral, the old town with Italian-looking facades and the quite picturesque (but quite modern) castle beyond the old walls. All interesting. All, incidentally, with plaques relating how many Poles were killed by the Germans in this spot or that or from this particular institution. (Our translator lost two brothers.) The recollection of Nazi slaughter is the one thing which unites everyone in this poor country.

After our city tour we visited some villages and then at two o'clock went to have lunch with the Father-Rector of the University.

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Also present, as a kind of co-host, was the rector of the state university. He asked me if I knew the difference between capitalism and socialism. In capitalism man exploits man. In socialism it is just the reverse.

The lunch, preceded by cherry-colored vodka, was excellent. Mostly we talked of the problems and poverty of the students, and after lunch the rector of the state university took me to see the hostels of his institution. The buildings, like the university, are new and rather rough, and the ground around is yet unlandscaped. The students live six to a smallish room and sleep in double-deck beds. There are common rooms and clubrooms and at the head of the stairs an open space with busts or photographs of Marx, Engels, Lenin (the "patron saints" someone said in passing), and various Polish revolutionaries, as well as traditional Polish heroes. In the girls' hostel I had a long discussion with six inhabitants of a room plus several visitors. I asked them what troubled them most (lack of hot water) and what most worried the management (lack of discipline and the extreme proximity of the male dormitory.) They wanted to know how many students slept in a room at Harvard, when visiting hours were over, how much the scholarships were, and whether our students had a good canteen. I was forced to improvise as necessary.

Then the Rector—a Professor of Biology—took me to his flat to introduce me to his wife. She is some twenty-six years younger than he, half English, and a judge formerly of the local juvenile and now of the criminal court.

I asked her about crime which she says is more or less constant—about ninety per cent being theft. Alcoholism is a grave complicating factor which she described as a most serious problem in Polish social life and one that will not be remedied until other goods become abundant and inexpensive.

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(Now a man cannot buy his family a decent living, so he does what he can which is to get blind.) Alcoholism among children is, she says, a growing and especially sad problem.

I told her that if ever I took up a criminal career I would hope to patronize her court. She replied that she would be delighted to have me as a customer.

Back at the Catholic University there was a cocktail party--Yugoslavian wine to be exact--followed by a visit to the library. Yet to come this evening is a late dinner after which I take the sleeper to Cracow. I am already very weary.

May 19

I had dinner last night with an architect in Lublin--it was pleasant and almost sumptuous, and his flat (which he shared with two other families) was a museum of Polish ceramics and art and of old books--mostly French first editions on art and philosophy. He showed them with much pride.

The train from Lublin to Cracow--another gradual conveyance--was crowded but we had clean and pleasant berths in a pre-war Wagon-Lite. I slept fitfully, but this was partly because I had dined too well. We got to Cracow at about 7:30 this morning.

We were met and breakfasted by members of the Cracow branch of the Economic Society and housed in a pleasant nineteenth century hotel--wonderfully spacious in comparison with Warsaw modern. Then we went on a tour of Cracow, guided by a professor of art and architecture--the Marienkirche with fine stained glass and its magnificent carved altarpiece. Wawel palace,

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the Cathedral, the old university, the market places. Cracow was undamaged
by the war—the Germans had to evacuate quickly to avoid being cut off—
and it is truly one of the most beautiful cities in Europe.

After paying respects to the rector—a professor of the history of
art—we lunched at the journalists' club. At five I gave the first of three
lectures. The audience followed me closely, and the questions were friendly
and good. Unlike the Warsaw lectures there was a fairly complete Polish
summary.

I had planned to give but one lecture. However, three had been scheduled
and I agreed to the change. Everyone was pleased when I said that I was
being exploited by the workers' state.

After the lecture I had an odd accident. With one or two of the
professors I strolled through the streets and parks—the latter are rich and
green and bursting with lilacs—and then turned off close to my hotel.
Presently I discovered that I was not on the right street and also that I had
not noticed the name of my hotel. After some search I made my problem known—
or tried to—in another hotel. The clerk, whose English was highly exiguous,
took me to be a candidate for the local insane asylum. My not having noticed
the name of the hotel or street seemed to him wholly implausible. But
presently he directed me to a hotel where I would be understood, which turned
out to be mine.

With the odd exception of the *Daily Express*, which I encountered the
other day, I have just seen the first English paper since my arrival. It is
the *Daily Worker*, and I suppose one should be thankful for very small blessings.

During the Hungarian revolt, it is said here, everyone behaved like