The Socialist System: The Political Economy of Communism

by János Kornai

To understand the dramatic collapse of the socialist order and the current turmoil in the formerly communist world, this comprehensive work examines the most important common properties of all socialist societies. JNBnos Kornai brings a life-long study of the problems of the socialist system to his explanation of why inherent attributes of socialism inevitably produced in-efficiency. In his past work he has focused on the economic sphere, maintaining consistently that the weak economic performance of socialist countries resulted from the system itself, not from the personalities of top leaders or mistakes made by leading organizations and planners. This book synthesizes themes from his earlier investigations, while broadening the discussion to include the role of the political power structure and of communist ideology. Kornai distinguishes between two types, or historical phases, of socialism. The "classical socialism" of Stalin, Mao, and their followers is totalitarian and brutally repressive, but its components fit together and make up a coherent edifice. Associated with names like Tito, KNBdar, Deng-Xiaoping, and Gorbachev, "reform socialism" relaxes repression, but brings about a sharpening of inner contradictions and the eventual dissolution of the system. Kornai examines the classical system in the first half of the book, and moves on to explore the complex process of reform in the second half. The Socialist System is addressed to economists in the first place, but also to political scientists, sociologists, and historians. In addition, it will appeal to policymakers, business analysts, and government officials who need to understand either formerly or presently communist countries.

Genres: Economics, Politics, History, Nonfiction, Russia, Philosophy, Social Science

672 pages, Paperback

First published January 1, 1992

Reviews

[T · Rating 3 out of 5]

I've just learned that Janos Kornai passed away last month. RIP. If there's one takeaway that stuck with me from reading his books and essays it would be the following : check the assumptions of any theory before swallowing it wholesale.


"Marx and his followers reckoned that planning would be a simple, easily soluble task. Experience has shown it to be an extremely complicated one. It can be solved somehow or other, but the practical solution is full of frictions, dysfunctional features, inefficiencies, and internal conflicts."

*Confusing theoretical modelling
*Poor referencing, with a number of studies unpublished, and difficult or impossible to locate
*Poor engagement with the ideology of the social systems analysed, as Kornai homogenises very different systems, by relying on the self-description of a country as the definition of how it operates. By this logic North Korea would be a democracy
*Shallow comparative analysis. This book idealises its opposite throughout, without many substantive concrete comparisons
*Excessive focus on the shortcomings of the system, which colours the interpretation far too much. For example, where impressive growth rates are demonstrated, they are aggressively doubted, with heavy implication that they are misleading or wrong, but the opposite is never considered
*A few things are asserted without direct evidence, but merely personal anecdote
*The orientation of the author isn't spelled out in a clear manner (a mishmash of Hayekian and biological theory)
*Evidence is highly selective, often drawn from explicitly political sources that are critical of the subject such as the Cato Institute
*Excessive pessimism at the prospect of reform, with extreme optimism for privatisation, which had huge negative consequences (e.g. the sky high suicide rate post-transition, worse working conditions, mass unemployment, corruption and crime etc)

+There is some, albeit limited and occasional, effort to make comparisons
+There are a lot of details that are typically missing in more politically focused accounts of different economies (e.g. the financial system is often overlooked in similar volumes)
+This is one of the few key textbooks on Soviet style economies, taking them all on in one volume
+Janos Kornai's experience as a Hungarian economist provides unique insight that few Western Sovietologists, economists and Anglophone experts have
+There is some evidence of engagement with the economic canon. For example Oskar Lange, Friedrich Hayek, Leonid Kantorovich are explored against the backdrop of economic development. I just wish Kornai had developed this a little more, as we know he had a deep understanding of them all, having written about them in other texts

[April · Rating 5 out of 5]

Best book, by far, ever written about socialist economies/ socialist economic systems.

[Alok · Rating 5 out of 5]

This is the book on socialism I was looking for! Takes an empirical view of communism like the empirical view of capitalism that Adam Smith took. I was totally dissatisfied with Karl Marx, who spent too much time on a critique of capitalism and not enough on analyzing socialist systems.

[Levanngai · Rating 5 out of 5]

If Adam Smith is considered the founding father of free market theory, offering classic examples of capitalism, then The Socialist System by János Kornai is one of the rare works that presents the socialist economic model in a direct, objective, and honest way. Unlike many heavily propagandist texts or one-sided criticisms found in the writings of Lenin or other Marxist theorists, this book does not attack capitalism merely to glorify communism. That’s why I feel this is exactly the book I’ve been looking for — and I truly enjoy reading it.

BTW, i don’t know how others may feel, but for me, as I read it, the author’s writing style gave me a sense of clarity and objectivity. It doesn’t feel biased or one-sided. Here, we are given a multidimensional perspective — one that looks at both communism and capitalism.