"So, Barkley, what book did you read this summer?" says the teacher at the beginning of the school year. Well, over a recent weekend at the beach in Lewes, Delaware after dropping off our daughter to be a freshman at George Mason, I read most of the intellectual memoir of the Hungarian economist, Janos Kornai, By Force of Thought, published by MIT Press recently. It is really an intellectual history of central and eastern Europe from the 1930s to the present.
So, Kornai became a true Stalinist in 1945 as an 18-year old Jew in Budapest who barely survived the Nazis and whose father and older brother did not. Doubts began creeping in during the early 1950s as he encountered friends who had been tortured into false confessions. He would split from Marxism, and during the 1956 Hungarian uprising went through the difficulty of surviving while not abandoning or violating friends or principles. Later he would be a fan of neoclassical economics in the 1960s, as he published papers on mathematical programming that could be used in principle for central planning, although he notes that the conditions for his two-level planning to work did not hold in reality, so he saw it as an ultimate critique. In the 1970s he would come to be a critic of neoclassical economics, in his book Anti-Equilibrium, even as he would be begin to spend half his time at Harvard (and the other half in Budapest). His most famous idea was of the soft budget constraint, a critique of attempts at market socialism in Hungary and elsewhere, although also applicable to western economies. Later, he would write wisely about the path of transition out of the Soviet bloc economies, with Hungary doing better than most in its path to join the EU. He emphasized a more social democratic approach that would retain substantial parts of the old social safety network, even as the economy mostly became market capitalist. This would preserve social structures and democracy and equality better than the harder line policies found in Russia and other states with far greater problems.
I have great personal respect for Kornai and think he deserves the Nobel Prize, although probably he will not get it, "transition" now being somewhat passe. But, he is a wise observer, and this book is deeply insightful and even moving.
7 comments:
You follow your heart. So I'm going to find that book even though I've never heard of him.
Well, seeing as how the late Branko Horvat never got the Nobel, I fail to see why Kornai should get it.
feeder,
I know that Horvat was proposed for it, but the problem is that he never generated a new idea. He was an excellent analyst of the idea of workers' management, which I am big fan of, but he did not invent the idea. Kornai invented the idea of the soft budget constraint.
I might note the complexity of Kornai's views on Marx. He reports in effect that it was really a matter of "conversion" along almost religious, and certainly moral, grounds that led him to Marxism in the first place, his perception that Stalin was the great enemy and conqueror of Naziism, with which he had had horrifying personal experience. In light of this the first thing he ever read in economics in the late 1940s when he was young (and he was an autodidact who did not get an undergrad degree, although he eventually got a grad one) was Marx's Capital Vol. I in the original German. Having done that was part of why he was put as the liaison from the Party newspaper, where he worked on economic issues, with the supreme decisionmaking body of the central planning board of the Hungarian economy while still in his early 20s. Kornai had a very real world education initially in economics.
His falling away from Marxism was thus also driven by moral issues, the discovery that the Hungarian government under the Stalinist Rakosi was lying and torturing innocent people. It took a while for him to do the backward induction from Stalin through Lenin to Marx, and I think it is fair to ask him if maybe he overdid his criticism of Marx in this disillusionment.
Probably my sharpest question for him on this is his claim that Marx did not check his theories against data or facts. My reading of Marx is struck by how much time he spent referring to data and real world facts of various sorts. So, I think Kornai is off on this to some degree. However, I think the specific fact that bothered him was the failure of the conditions for avoiding the transformation problem to hold. He was one of those for whom the transformation problem was an ultimate deal breaker, as a serious theoretician, although he argues that Marx himself knew of the problem, and that was why he did not publish the latter two volumes of Capital in his lifetime (a matter of considerable dispute and debate since).
I will note that Kornai did not do as many like him did, jump to the opposite extreme. He said that he was always open to useful arguments drawing on Marx, including the use of some of his "metaphors." He also retained a strong sense of justice and remains as near as I can tell in a social democratic political position, not a fire-breating "the god that died" sort of right wing ranting and raving. He thought long and hard about his views, and took and still takes them seriously.
Not enough time left in the summer to read this one? See the review at the New York Review of Books. You're nuts if you don't subscribe, but the article is worth the $3.
``He also retained a strong sense of justice and remains as near as I can tell in a social democratic political position''.
Really? I recall reading a remark addressed to people in the US to the effect that the Hungarian people thought economic inequality immoral. I don't recall the exact wording, but it seemed clear that he expected the reader to be shocked by this. My reaction reading this was, ``good for them'' and ``to hell with you''.
Barkley,
It's easy to understand his rejection of Stalin(ism) but does the book go into any detail re. _his_ perspective on the value to price transformation, i.e. marx specific 'deal breaker' or also later marxists ?
mark gilbert,
I do not subscribe to NY Review of Books and do not feel like paying $3. Any tidbits from this review by Skidelsky worth sharing with the rest of us?
feeder,
I suspect that you misinterpreted or overinterpreted Kornai on the matter. He is very concerned about morality and has definitely supported maintaining most of the social safety net in Hungary, even if he has had some specific criticisms about parts of it.
Juan,
Kornai clearly thought that the various proposed algrebraic transformations were a waste of time and effort, basically just useless obfuscation.
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