From Socialism to Capitalism

Eight Essays
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256 pages

Eight essays connected by various common strands. The most important one is the community of the main subject-matter: socialism, capitalism, democracy, change of system. These four expressions cover four phenomena of great and comprehensive importance. Each piece in the book deals with these and the connections between them.

One of the Leitmotifs is the “capitalism/socialism” pair of opposites. Capitalism has a history of several hundred years, while the socialist regime existed only for a few decades. But this pair of opposites was central to the history of the twentieth century. This antagonism put its stamp on political thinking, on the foreign policy and military preparedness of every country, and on some appallingly destructive armed conflicts. All these had great secondary influence on each country’s economic development and the standard of living and disposition of its inhabitants.

None of the studies is confined to one country—not to Hungary or to any other. Each tries to embrace the problems common to greater units. However, the greater unit comprehended is not the same in each study. One may deal with the capitalist or socialist system in general, another will all the post-socialist countries, and a third the Central East European region. But all extend the analysis beyond the borders of one country.


1 The Coherence of the Classical System
The Main Line of Causality
The Affinity among Elements of the System
The Prototype and the National Variations
The Soviet Effect
The Viability of the Classical System

2 The Inner Contradictions of Reform Socialism
Transformation without a Strategy
The Evolution of a Private Sector
The Persistence of Bureaucracy
Alternative Forms of Social Organization
The Weakness of “Third Forms”
Normative Implications

3 Market Socialism? Socialist Market Economy?
Interpretation of the Term “Market”
Interpretation 1: Marx’s Concept
Interpretation 2: The Walrasian Concept
Interpretation 3: The Leninist Concept
Interpretation 4: The Social Democratic Concept
Interpretation 5: What are the Current Chinese and Vietnamese Interpretations of “Socialism”?

4 The Speed of Transformation
Ownership Reform and Development of the Private Sector
Macroeconomic Stability

5 The Great Transformation of Central Eastern Europe: Success and Disappointment
In the Context of World History
From the Perspective of Everyday Life
The Tasks of the Economists’ Profession

6 What Does “Change of System” Mean?
Positive Versus Normative Approach
A Positive Approach to the Change of System
A Positive Approach to Changing the Political Structure
The Reception of Capitalism and Democracy—A Normative Approach
“Replacing the Elite” and “Dispensing Justice”— A Normative Approach
Concluding Remarks
Appendix: The Transformation of China

7 What can Countries Embarking on Post-socialist Transformation Learn from the Experiences so Far?
Starting Points
Some Lessons
Concluding Remarks

8 The System Paradigm
A System Paradigm, Not a Transformational Paradigm
A Brief Intellectual History
The Main Attributes of the System Paradigm
Post-socialist Transformation: The Great Challenge
Some other Puzzles
Failures of Prediction
Appendix: On segregation of the social science

Previous Publications of the Studies in this Volume
Name Index
Subject Index

"A book which could be recommended to intellectuals interested in regime change, to economists wishing to learn on the genesis of transition, and to anybody who simply wants to understand why economics is a very complex science going very much beyond modeling little chunks of reality with much technical but quite exploratory ambition. Very lucid and thought provoking with a great explanatory power regarding the future of economics, social sciences... and probably critical thinking as well. It is the latter aspect of the genuine scientific research on which Kornai's new collection of essays provides its readership with a great number of examples and insights."