About the free market in the USA and in Poland

Kevin Hassett, chairman of the Council of Economic Advisors to President Trump, the most influential American economist today, visited SGH Warsaw School of Economics on May 7. His visit, consisting of meetings and discussions, was part of the celebration of the 70th anniversary of the Faculty of World Economy at the SGH.

Hassett delivered a lecture on: Poland and free markets, lessons for the world in which, he discussed, inter alia, the Polish economic transformation experiences persuading into holding on to free market capitalism.

The head of economic advisors to the US president described the current state of the US economy and the economic successes of the present administration, including a significant increase in the number of new jobs and a decrease in the poverty zone among the employed. Above all, however, he praised 30 years of stable growth of the Polish economy, and in a television interview he underlined the contribution of the SGH graduates to the Polish economic success. He recalled Professor Leszek Balcerowicz, whom he met in the 1990s, with great sympathy. - We discussed your political transformation with Balcerowicz, especially tax reforms that were most interesting to me. We agreed then that three things were needed to attract investment: clear and low taxes, good and stable regulations, and the rule of law - he recalled. Hasset also argued that Poland and the USA could serve as an example for others in achieving high economic growth.

According to Kevin Hassett, the Polish example is positive because (like some other post-communist countries) Poland understood better than capitalists themselves what capitalism was. The reason is simple: Poland experienced what it meant to be on the other side. When asked by prof. Marzenna Weresa, dean of the Collegium of World Economy at SGH Warsaw School of Economics, about the competitiveness of our economy in the world, the guest answered decisively: ‘From our perspective, Poland is one of the most attractive investment countries. American companies are eager to invest their capital here.’

Praise for the Polish economy reached its peak when Kevin Hasset quoted his talks with President Donald Trump: - During the briefing I told President Trump: ‘Mr. President, we have three percent economic growth.’ He replied: ‘Three percent? Poland has five.’ When the US tax reform was being prepared and I said we would cut CIT to twenty-one percent, he replied: ‘The CIT rate in Poland is nineteen.

When interviewed by Rzeczpospolita, the SGH guest said: - Europe can learn a lot not only from the USA, but also from Poland. First of all it can learn how to loosen business regulations. Additionally, the economist stressed that the USA had the best universities in the world. But in the barrel of honey there is also a spoon of tar: tuition increases by up to 9-10% per year and the debt of those who have taken a loan for college has become a serious social problem. In addition, according to Hassett, the current generation is the least entrepreneurial in the US history and the US administration is wondering how to address this issue.

However, the visit of President Trump’s advisor was primarily marked by controversies related to the operations of cyber corporations.

There is a risk that Poland is going in the wrong direction if it starts deterring direct foreign investment, which is the driving force of the country. The discussion on the digital tax can serve as an example. Why hit American Internet companies with an oppressive digital tax that is additionally difficult to enforce? I am convinced that the original EU approach in the form of a digital tax will cause an avalanche of litigation. If Poland decides to continue along these lines, I am certain that it will be a big mistake. The money spent on lawyers will exceed the amount of resources obtained from the indicated source, said Kevin Hassett.

DEVELOPED BY: AW

The discussion with Kevin Hassett on the contemporary challenges of the world economy was led by prof. Marzenna Weresa, dean of the Collegium of World Economy of SGH Warsaw School of Economics.

Poland has, better than capitalists themselves, understood what capitalism is.