János Kornai

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János Kornai, (21 January 1928-), born in Budapest, Hungary, is an economist noted for his criticism of the command economies of Eastern European communist states.

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[edit] Biography

Professor Kornai studied at the Karl Marx University of Economics, in Budapest and holds a 'candidate' degree from the Hungarian Academy of Sciences. He wrote that he chose to become an economist after reading Marx's Das Kapital.[1] He starts working in Szabad Nép, the Hungarian Communist Party newspaper, but he is fired for lack of Communist convictions in April 1955.[1]

He was a Member of the Board of the Hungarian National Bank (central bank) until 2001, and has authored many economics-related books and papers. From 1958 onward Kornai received many invitations to visit foreign institutions, but he was denied a passport by the Hungarian authorities and was not allowed to travel until 1963, after political restrictions had begun to ease.

From 1967 until 1992 he has been a Research Professor at the Institute of Economics, Hungarian Academy of Sciences. Kornai joined the faculty of Harvard University in Cambridge, Massachusetts, USA, in 1986 and was named the Allie S. Freed Professor of Economics in 1992. In the same year, he became a Permanent Fellow of Collegium Budapest, Institute for Advanced Study. He retired from Harvard in 2002.

[edit] Works

In the late 1950s, he was among those initiating the use of mathematical methods in economic planning. He elaborated the theory of two-level planning with Tamás Lipták and directed the first large-scale economy-wide multi-level planning project. Professor Kornai's early article Overcentralization (1953) created a stir in the West and represented his first disillusionment with the communist central planning.

In his 1980 book, Economics of Shortage, perhaps his most influential work, Kornai argued that the chronic shortages seen throughout Eastern Europe in the late 1970s (and which continued during the 1980s) were not the consequences of planners’ errors or the wrong prices, but rather systemic flaws. In his 1988 book, The Socialist System, The Political Economy of Communism he argued that the command economy based on the unchallenged control by a Marxist-Leninist communist party leads to a predominance of bureaucratic administration of state firms, through centralized planning and management, and the use of administrative pricing to eliminate the effects of the market, leading to individual responses to the incentives of this system, ultimately causing observable and inescapable economic phenomena known as the shortage economy. Kornai is very skeptical of efforts to create market socialism.

His later works including The Road to a Free Economy (1990), Highway and Byways (1995), Struggle and Hope (1997) and Welfare in Transition (2001) deal with macroeconomic aspects and the interaction between politics and economic policy in the period of economic transition in the post-Soviet states. At present he leads a comprehensive research project, Honesty and Trust in the Light of Post-Socialist Transition at Collegium Budapest, where he now is an emeritus fellow.

In 2007 he published a memoir, By Force of Thought, on his research and the social and political environments in which he did his work.

[edit] References

  1. ^ a b (French)François Fejtő, Les mémoires politiques et intellectuels d'un grand économiste hongrois, Sociétal, Q1 2008, pp.110

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