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Desperately Seeking Adam Smith
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18107 |
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Section : |
BOOK WORLD
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11 / 1990 |
2,058 Words |
| Author
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D. Gale Johnson
D. Gale Johnson is professor emeritus in economics at the
University of Chicago and has written extensively on the
economics of socialist countries. |
THE ROAD TO A FREE ECONOMY
Shifting from a Socialist System: The Example of Hungary
Janos Kornai
New York: W.W. Norton & Company, 1990
224 pp. $16.95
For nearly four decades Janos Kornai has been an outstanding observer and critic of the functioning of socialist economies. Much of what we know about how such economies actually function is because of his insights. As a young man, he was a reformer - he participated in devising reforms of the Hungarian socialist economy. He is now a revolutionary, a peaceful one to be sure. He calls not for the reform of socialist economies but for their abolition. His alternative is a market economy based upon private property and competition.
This book's contents will come as an enormous disappointment to those who hold that there is a third economic system somewhere between socialism and capitalism. Kornai persuasively argues that such a third way dos not exist. This is a particularly shattering conclusion for those who do not want to accept the importance of private property as the engine of economic prosperity. It is shattering, at least in part, because in his early studies of socialist planned societies Kornai did believe that if decisions could be decentralized them market socialism could be made to work. In 1959 he argued that much of the failure of socialism, at least in Hungary, was the over centralization of decisions. But perhaps worst of all, for those who still are looking for ways to reform socialist economies, he comes down on the side of the two economists who are most disliked and
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