The Socialist System The Political Economy Of Communism

673 Pages·1992·73.876 MB·English

by  Kornai, János

THE SOCIALIST SYSTEM
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THE SOCIALIST SYSTEM
THE POLITICAL ECONOMY
OF COMMUNISM
János Kornai
CLARENDON PRESS OXFORD
This book has been printed digitally and produced in a standard specification
in order to ensure its continuing availability
OXFORD
UNIVERSITY PRESS
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© János Komai, 1992
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Reprinted 2007
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ISBN 978-0-19-828776-6
For my first reader, Zsuzsa
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Contents
List of Figures xiii
List of Tables xv
Prefacee xix
PART ONE: POINTS OF DEPARTURE
1. The Subject and Method 3
/. / Specific Lines of Historical Development
and General Features 3
1.2 Socialist Countries 4
1.3 Interpretation of the Term "Socialism" 9
1.4 Political Economy 11
1.5 Positive Analysis 12
1.6 Models 15
1.7 Evaluation 16
2, Antecedents and Prototypes of the System 18
2.1 Marx's Image of Socialism 18
2.2 System Prototypes 19
2.3 The System before the Socialist Revolution 21
2.4 The Revolutionary Transition toward the Classical System 26
PART TWO: THE ANATOMY OF THE CLASSICAL SYSTEM
3. Power 33
3.1 The Party 33
3.2 The State 36
3.3 The Mass Organizations 39
3.4 Cohesive Forces 40
3.5 Internal Conflicts 44
3.6 Repression and the Totalitarian Nature of Power 45
4, Ideology 49
4.1 The Official Ideology 49
4.2 The Socialist System's Sense of Superiority 50
4.3 The Basic Promises 53
4.4 The Self-Legitimation and Paternalistic Nature of Power 55
4.5 Discipline, Willing Sacrifice, and Vigilance 57
4.6 Power and Ideology 59
vii
viiii CONTENTS
5. Property 62
5.1 Explanation of the Concepts 62
5,2 Some Characteristic Property Forms before the Advent
of the Socialist System 67
$3 The State-Owned Firm 71
5.4 Other State Property Forms 75
5.5 The Cooperative 76
5.6 Private Property and Production Activity
of a Private Nature S3
5.7 Capitalism, Socialism, and Property 87
6. Coordination Mechanisms 91
6.1 Main Types 91
6.2 Some Observations on the Main Types 95
s
6.3 Bureaucratic Coordination 97
6.4 Market Coordination 100
6.5 Self-Governing Coordination 103
6.6 Ethical Coordination 105
6.7 Family Coordination 106
6.8 Spontaneous and Artificial Changes 108
7. Planning and Direct Bureaucratic Control 110
7.1 The Precursors of Socialism on the Subject of Planning 110
7.2 Initial Approach: Elaboration of the Plan 111
7.3 Initial Approach: Plan Implementation and Management t 114
7.4 The Motivation of Leaders in the Economic .Bureaucracy 118
7.5 Bargaining and Inner Conflict t 121
7.6 Planning, Management, and Politics 124
7.7 The Problem of Informationn 127
8. Money and Price 131
8.1 Banking 131
8.2 The State Budget 134
83 Survey of Money Flows 139
8.4 Soft and Hard Budget Constraint 140
8.5 Income and Price Responsiveness 145
8.6 Administrative Producer Prices 149
8.7 Administrative Consumer Prices 153
8.8 Market Prices 155
8.9 Nonprice Signals 156
9. Investment and Growth 160
9.1 Expansion Drive and Investment Hunger 160
9.2 Central Allocation and Investment Tension 163
9.3 Investment and Consumptionn 165
CONTENTS IX
9.4 Priorities 171
9.5 Extensive and Intensive Methods 180
9.6 Fluctuations in Growth; Cycles 186
9.7 Measurement of Aggregate Output 193
9.8 The System-Specific Growth Type: Forced Growth 197
9.9 Growth Performance 199
10. Employment and Wages 203
10.1 The Road to Full Employment t 204
10.2 The Development of Chronic Labor Shortage 211
10.3 Direct Bureaucratic Control of Employment and Wages 216
10.4 Employer-Employee Relations in the Factory 218
10.5 Bureaucratic and Market Influences on Wages 224
11. Shortage and Inflation: The Phenomena 228
11.1 Shortage Phenomena and the Shortage Economy 229
11.2 The Process of Demand Adjustment t 234
11.3 Horizontal and Vertical Shortage 240
11.4 Shortage and Surplus 243
11.5 Market Regimes: The Buyers' and the Sellers' Market 245
11.6 Normal Shortage and Normal Surplus 252
1L7 Open, Declared, and Hidden Inflation 255
12. Shortage and Inflation; The Causes 262
12.1 The Behavior of the Firm: Short-Term Decisions 262
12.2 The Behavior of the Firm: Long-Term Decisions 268
12.3 The Behavior of the Bureaucracy Managing Production 270
12.4 Relative Prices 273
12.5 Repressed Inflation in Interfirm Relations 275
12.6 Repressed Inflation in the Consumer Sphere 278
12.7 Excess Demand on the Macro Level 280
12.8 The Propensity to Inflation; the Relationship
between Shortage and Inflation 283
12.9 The Self-Inducement and Reproduction of Shortage 286
12.10 The System-Specific Nature of the Causes 288
12.11 Economic Efficiency and Technical Progress 292
13. Consumption and Distribution 302
13.1 The Growth of Consumption 302
13.2 Other Factors in Material Welfare 304
e
13.3 Economic Security 311
13.4 First Approach: Distribution of Money Income 316
13.5 The Distribution of Material Welfare:
Other Manifestations 318