János Kornai and Marxism

A few days ago I promised to write something about a short essay by János Kornai, the famous Hungarian economist, on his encounter with Marxism. The essay, entitled “Marx egy kelet-európai értelmiségi szemével” (Marx through the eyes of an Eastern European intellectual), appeared in a volume of Kornai’s collected essays, Gondolatok a kapitalizmusról: Négy tanulmány (Thoughts on capitalism: Four essays) (Budapest, Akadémia, 2012).

Kornai in this essay describes his road to Marxism and his discovery of some of the fundamental flaws of the Marxist system. He had just turned eighteen in 1945 and was open to the ideas of the Hungarian Communist Party (MKP) after going through  a war, losing his father in Auschwitz and his older brother somewhere in the Soviet Union where he served in a labor battalion. He was attracted to the party that was most resolutely opposed to the Horthy regime and all that it entailed.  So he began his study of the works of Karl Marx in the original German because at that time no Hungarian translation was available.

János Kornai / www.kornai-janos.hu

János Kornai / www.kornai-janos.hu

He began with Das Kapital and was struck by the sharp logic and the precise formulations of his ideas. These attributes appealed to Kornai because he himself is “a maniac for order and precise thinking.” Moreover, eventually he began to surmise that Marxism had universal application. It was just as applicable to the evaluation of a theatrical production as it was to economic problems. Here Kornai steps back a little and observes that “young people desire some kind of universal explanation for all worldly phenomena.” In addition, Marxism appealed to him emotionally because of the German philosopher’s passionate commitment to the oppressed and the dispossessed.

But then came the disillusionment. This process occurred not on an intellectual plane but on moral grounds. It happened when he met an old communist who has been arrested and tortured. His faith in the system was shaken. He had encountered critical voices against Marxism earlier but refused to take them seriously. Once his faith in the moral superiority of the system started to waver, however, he began noticing things that he didn’t want to see before. Problems with the practical application of  socialism. In vain did he look for answers in Marx’s works. It was not that Marx gave wrong answers to these questions, like wastefulness, low quality products, the constant scarcity of goods. The real problem was that it never occurred to him to pose any of these questions in the first place.

Once Kornai’s faith was shaken he began studying Marx more critically and found that there are some really fundamental precepts of Marxism that have proven to be dead wrong in the years since Marx wrote the Communist Manifesto. One of these was Marx’s insistence that as a result of the capitalist mode of production the lives of workers will become more and more wretched. It was enough to look around in well-developed capitalist countries to see that this Marxist prediction was wrong. Exactly the opposite was true: the living standards of the proletariat were steadily improving. Without going step by step through his mental processes, the final result was that even before the 1956 Revolution Kornai had become a critic of the socialist system.

So, eventually he had to pose the question to what extent Marx was responsible for what was going on in the Soviet Union of Lenin, Stalin, Khrushchev, and Brezhnev, in the China of Mao Zedong, and in other socialist countries. What is the relation between the theoretical ideas of Marx and the historical reality of the socialist system? Here I will quote Kornai verbatim: “I will try to answer concisely: the socialist system realized Marx’s plan.”

Kornai is aware that some people might counter that this judgment goes too far. But in Marx’s opinion a market economy doesn’t work. The market is anarchy and chaos. In its place a planned economy must be introduced. Moreover, private property must be abolished and it must be replaced by commonly held ownership. Both of these very basic Marxist doctrines became a reality in the socialist countries. When Lenin, Stalin, Khrushchev, and others invoked Marx’s name and work to defend their policies, they were correct. They had every reason to appeal to him. They were the ones who realized Marx’s dreams.

Kornai also finds Marx “guilty” of rejecting “empty, formal bourgeois constitutionalism, the parliamentary system, and democracy.” He didn’t seem to realize that once a market economy and individual initiatives are gone the system must be directed from above and that very fact results in the repressive apparatus of the state or the ruling party. So, Marx is responsible for what happened in the Soviet Union and in other socialist countries, but it is “intellectual responsibility.”

Finally, Kornai briefly analyzes what we still can learn from Marx. After the collapse of the socialist system the belief spread in intellectual circles that Marxism was dead. But in the last few years, especially since the 2008 financial crisis, the opposite has been true. Marx is in vogue again. “Prophets” have arrived who predict that capitalism is dead, a view Kornai doesn’t share. Yes, capitalism right now is going through a deep crisis but it is alive and will most likely live for a very long time.

Nonetheless, Kornai believes there are some valuable Marxist teachings that are still applicable. One of these is the overextended expansion of credit and production that far surpasses demand. Marx talked about these problems in the first and third volumes of Das Kapital and called attention to the grave consequences of these phenomena. Today we see the results of the irresponsible granting of credit all too clearly. As for the balance between supply and demand, Marx was especially interested in imbalances in the labor market. Today the imbalance in the labor market poses serious problems in the developed world. Marx was one of the pioneers in discovering this danger.

In addition, Kornai also looks upon Marx as the first person who tried the develop something Kornai calls a “system paradigm” (rendszerparadigma). He was an economist, a sociologist, a political scientist, and a historian who tried to combine all these disciplines. Today we call this an interdisciplinary way of looking at the world which attempts a comprehensive understanding of society as a whole.

Kornai ends his brief essay by saying that he is not a Marxist but neither is he a Keynesian. He doesn’t belong to any school or -isms. He considers himself to be an eclectic economist who was influenced by Joseph A. Schumpeter, John Maynard Keynes, Friedrich Hayek, and Marx “who in this list is always mentioned in the first place.”

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googly
Guest

Kornai is right that capitalism is here to stay for the long term. It’s obviously an expression of natural human tendencies, and it developed spontaneously, over a long period of time, without a guiding ideology. Of course it has problems, and another human tendency, to look to a strong father figure to fix those problems, will probably always resurface. The question is, will Hungarians decide to finally stop looking to that father figure, or will we be stuck with Latin-American-type caudillos for the next generation or two? In many ways Hungary is much like a Latin American country, and that leadership style remains very popular there. Hopefully the Chilean and Brazilian models will prove to be more popular than the Venezuelan and Nicaraguan ones.

Ms KKA
Guest

The problem as I see it, is not with capitalism…it is with capitalists. Because man is not, by nature, altruistic, when the opportunity to acquire money, power, position, etc. presents itself, it is almost always taken advantage of, with little or no thought given to whether said acquisition is done in an ethical manner that does not cause widespread destruction and despair. The reason that the CEO’s of the Fortune 500 companies can sleep at night is because there are so many levels of corporate cushioning between them and the workforce that they swipe away into poverty with just a scratch of their pen, they haven’t a clue what they have done. It’s all about the bottom line, and, for humans, the bottom line is death.

Member
Ms KKA : The problem as I see it, is not with capitalism…it is with capitalists. Because man is not, by nature, altruistic, when the opportunity to acquire money, power, position, etc. presents itself, it is almost always taken advantage of, with little or no thought given to whether said acquisition is done in an ethical manner that does not cause widespread destruction and despair. The reason that the CEO’s of the Fortune 500 companies can sleep at night is because there are so many levels of corporate cushioning between them and the workforce that they swipe away into poverty with just a scratch of their pen, they haven’t a clue what they have done. It’s all about the bottom line, and, for humans, the bottom line is death. I respectfully disagree. It is not the “capitalists” who are the mean, bad wolves, as the same pattern was true for the communists. The lead members of the communist party were never equal with the working class, and they did live a way better lifestyle. Fidel Castro is one of the wealthiest man in Cuba, and you cannot call Cuba a capitalist country. China is also not capitalist, and the living… Read more »
tappanch
Guest

In every stockjobbing swindle every one knows that some time or other the crash must come, but every one hopes that it may fall on the head of his neighbour, after he himself has caught the shower of gold and placed it in safety. Après moi le déluge! is the watchword of every capitalist and of every capitalist nation.

Hence Capital is reckless of the health or length of life of the labourer, unless under compulsion from society. [Marx, Capital, Volume I, Chapter 10 (1867)

tappanch
Guest

“Everyone who knows anything of history also knows that great social revolutions are impossible without the feminine ferment. Social progress may be measured precisely by the social position of the fair sex”

Marx, Letter to Kugelmann (1868)

Öcsi
Guest

Marxists argued (correctly, in my opinion) that socialism must be established globally. It can not work nationally and all attempts to try have led to less than desirable places to live, if not outright hellholes.

The global economy now subjugates every national economy. Yes, the living conditions for workers in Western countries have improved considerably. But global income distribution is as dismal as ever, if not worse. The few still control the lives of the many. So the way I see it, the possibility of establishing socialism globally now exits. No easy task, though.

LwiiH
Guest

Öcsi :
Marxists argued (correctly, in my opinion) that socialism must be established globally. It can not work nationally and all attempts to try have led to less than desirable places to live, if not outright hellholes.

Gee, I wonder why that’s always happened?

If one of the roles of government is to keep balance and fairness in the system, all we have to do is agree on a definition of fair and then decide what constitutes balance. Then setup rules for everyone to follow…see it’s simple!

Ms KKA
Guest
Some1 : Ms KKA : The problem as I see it, is not with capitalism…it is with capitalists. Because man is not, by nature, altruistic, when the opportunity to acquire money, power, position, etc. presents itself, it is almost always taken advantage of, with little or no thought given to whether said acquisition is done in an ethical manner that does not cause widespread destruction and despair. The reason that the CEO’s of the Fortune 500 companies can sleep at night is because there are so many levels of corporate cushioning between them and the workforce that they swipe away into poverty with just a scratch of their pen, they haven’t a clue what they have done. It’s all about the bottom line, and, for humans, the bottom line is death. I respectfully disagree. It is not the “capitalists” who are the mean, bad wolves, as the same pattern was true for the communists. The lead members of the communist party were never equal with the working class, and they did live a way better lifestyle. Fidel Castro is one of the wealthiest man in Cuba, and you cannot call Cuba a capitalist country. China is also not capitalist, and… Read more »
J Grant
Guest
“He didn’t seem to realize that once a market economy and individual initiatives are gone the system must be directed from above and that very fact results in the repressive apparatus of the state or the ruling party.” – writes Kornai and he is very wrong. He, and many others, equate the practice of socialism in Eastern Europe between 1948 and 1990, in Cuba and other places as socialism. It was nothing of the kind. No space here to go into how and why Lenin’s socialism had deteriorated into Stalinism in the Soviet Union, but once it did all the other so called “socialist” regimes were set up in its image. Hungarian ‘socialism’ was established on the bayonets of the Red Army, not fought for and won by the Hungarian people themselves. It never had workers’ democracy which is the other criteria for a free and democratic socialist system apart from the nationalization of he means of production and exchange. The only time Hungary had ever seen workers’ democracy was in 1956 when the workers’ councils were the embryonic form of this new type of democracy and it would have developed into that had it not been drowned in blood… Read more »
Karl Pfeifer
Guest

Hungarian Marxists only interpret the world, while Orbán and his ilk change Hungary.

petofi
Guest

If socialism worked, it would’ve worked in Israel where the kibbutzes were the closest thing to it. It didn’t work. Or, it might’ve worked in China, which has the most obedient citizenry in the world. It (China) has injected liberal doses of capitalism into its system.

Socialism gives rise to laziness, and lacks the incentive for individual self-improvement. It’s flawed as a political system for People.

tappanch
Guest

Marx once said to Lafargue:
‘Ce qu’il y a de certain c’est que moi, je ne suis pas Marxiste.’

tappanch
Guest

Ideal ranking in Hungarian soccer:

1. Ferencvaros
2. Videoton
3. Felcsut

in Orban’s long interview for the Felcsut Soccer Academy website

http://www.pfla.hu/?q=news/4151

tappanch
Guest

Orban government will give the revenue from online gambling to soccer.

Orban was a third-rate soccer player, would have been a good chairman of the the soccer association, and a horrible Duce for Hungary.

Karl Hungus
Guest
What is Marxism, or capitalism for that matter? I think concepts were left undefined, which makes debate in this case impossible. Can Hungary or Denmark be called capitalist states where more than half of the GDP is redistributed every year (and thus 50% of the income in aggregate is not subject to market forces)? When Marx wrote up his ideas the state (central government) perhaps maintained an army, courts, a limited administration, but now we have social security, pensions, football stadiums, public transport mostly paid for by the taxpayers, competition laws, building codes etc. My personal question would be why would anybody think that one single person could write (dream up) everything as a coherent (belief) system, the theses of which would provide answer to everything? Isn’t it obvious to everybody, though not at age 18 perhaps, that the world is extremely complex? Marx like all canonized thinkers had indeed a lot of important insights, but why would anybody want to create a world on his ideas (which he changed over time and have been interpreted in various ways) alone? Kornai’s book sounds to me more of an account of a personal intellectual journey rather than a thorough ideological analysis,… Read more »
Marcel Dé (@MarcelD10)
Guest

Marxism calls itself the theory of scientific socialism. It dissociates itself from unscientific version of socialist ideas, branding them naive and utopian. According to its own assertions, Marxism alone presents a scientific method for researching society and comprehending the body of knowledge about it.I broke with Marxism because I became convinced that it lacked foundations in precisely this respect. (…)The problem was not just that the theories performed badly in all these comparisons, that the Marxist dogmas failed to match reality. The main trouble was that Marx himself and his later disciples did not feel the primary intellectual duty to apply the elementary criterion of scholarship: testing their ideas against reality.

Is the essay you’re referring to different from the text that was published in English as By Force of Thought: Irregular Memoirs of an Intellectual Journey (MIT Press, 2006)?

Marcel Dé (@MarcelD10)
Guest

Karl Hungus :
Kornai’s book sounds to me more of an account of a personal intellectual journey rather than a thorough ideological analysis, for which he may even lack the analytical tools (being an economist and a mathematician in his early career, if I am not mistaken).

On the contrary since Marx himself (and Marxists) always posed as scientists, notably economists, Kornai is one of those who have precisely, patiently, demonstrated their flaws.

Or has « ideology » become a science and nobody warned me? I wouldn’t put Marx’s works to the trash, far from it, yet it is ironic that he has eventually met the fate he had scornfully assigned to Proudhon for: a philosopher for economists, and an economist for philosophers.

Self-liberator
Guest

Kornai is fun. His contribution to our thinking is remarkable.
It would be important to improve the thinking of each individuals.
A self-liberation is essential.
Hungarians in most cases are too dependent on central theories.
And most Hungarians may fail simple moral tests.
Each individual must evaluate his own moral failures.
In America, the average individual is superior to most other nations.
The plain protestant ethics is working. Forget the silly judeo-christian mambo-jumble.
America can adopt capitalism or socialism, and will remain a superior country.
Land of the free and brave.
It is always refreshing to pass the immigration control, and enter freedom here.

googly
Guest
Self-liberator : Kornai is fun. His contribution to our thinking is remarkable. It would be important to improve the thinking of each individuals. A self-liberation is essential. Hungarians in most cases are too dependent on central theories. And most Hungarians may fail simple moral tests. Each individual must evaluate his own moral failures. In America, the average individual is superior to most other nations. The plain protestant ethics is working. Forget the silly judeo-christian mambo-jumble. America can adopt capitalism or socialism, and will remain a superior country. Land of the free and brave. It is always refreshing to pass the immigration control, and enter freedom here. The average American is superior in what way? If you compare America’s crime rate to other countries, or its capital punishment rate, or its obesity rate, or its inequality rate, or its average life-span, or even its score on science and math tests, America is arguably inferior, especially to other wealthy nations. If more nations were as wealthy as the U.S., Americans would probably look even less impressive. I hate to say it, but your idea of “freedom” probably differs from most people’s. In my extensive experience, Hungarians are no less “moral” than Americans.… Read more »
googly
Guest
Karl Hungus : What is Marxism, or capitalism for that matter? I think concepts were left undefined, which makes debate in this case impossible. Can Hungary or Denmark be called capitalist states where more than half of the GDP is redistributed every year (and thus 50% of the income in aggregate is not subject to market forces)? When Marx wrote up his ideas the state (central government) perhaps maintained an army, courts, a limited administration, but now we have social security, pensions, football stadiums, public transport mostly paid for by the taxpayers, competition laws, building codes etc. My personal question would be why would anybody think that one single person could write (dream up) everything as a coherent (belief) system, the theses of which would provide answer to everything? Isn’t it obvious to everybody, though not at age 18 perhaps, that the world is extremely complex? Marx like all canonized thinkers had indeed a lot of important insights, but why would anybody want to create a world on his ideas (which he changed over time and have been interpreted in various ways) alone? Good point! I agree that the most successful systems are hybrids of capitalism and socialism, and arguably… Read more »
googly
Guest
J Grant : “He didn’t seem to realize that once a market economy and individual initiatives are gone the system must be directed from above and that very fact results in the repressive apparatus of the state or the ruling party.” – writes Kornai and he is very wrong. He, and many others, equate the practice of socialism in Eastern Europe between 1948 and 1990, in Cuba and other places as socialism. It was nothing of the kind. No space here to go into how and why Lenin’s socialism had deteriorated into Stalinism in the Soviet Union, but once it did all the other so called “socialist” regimes were set up in its image. Hungarian ‘socialism’ was established on the bayonets of the Red Army, not fought for and won by the Hungarian people themselves. It never had workers’ democracy which is the other criteria for a free and democratic socialist system apart from the nationalization of he means of production and exchange. The only time Hungary had ever seen workers’ democracy was in 1956 when the workers’ councils were the embryonic form of this new type of democracy and it would have developed into that had it not been… Read more »
Member
Ms KKA : Some1 : Ms KKA : The problem as I see it, is not with capitalism…it is with capitalists. Because man is not, by nature, altruistic, when the opportunity to acquire money, power, position, etc. presents itself, it is almost always taken advantage of, with little or no thought given to whether said acquisition is done in an ethical manner that does not cause widespread destruction and despair. The reason that the CEO’s of the Fortune 500 companies can sleep at night is because there are so many levels of corporate cushioning between them and the workforce that they swipe away into poverty with just a scratch of their pen, they haven’t a clue what they have done. It’s all about the bottom line, and, for humans, the bottom line is death. I respectfully disagree. It is not the “capitalists” who are the mean, bad wolves, as the same pattern was true for the communists. The lead members of the communist party were never equal with the working class, and they did live a way better lifestyle. Fidel Castro is one of the wealthiest man in Cuba, and you cannot call Cuba a capitalist country. China is also… Read more »
spectator
Guest
Ms KKA : Some1 : Ms KKA : The problem as I see it, is not with capitalism…it is with capitalists. Because man is not, by nature, altruistic, when the opportunity to acquire money, power, position, etc. presents itself, it is almost always taken advantage of, with little or no thought given to whether said acquisition is done in an ethical manner that does not cause widespread destruction and despair. The reason that the CEO’s of the Fortune 500 companies can sleep at night is because there are so many levels of corporate cushioning between them and the workforce that they swipe away into poverty with just a scratch of their pen, they haven’t a clue what they have done. It’s all about the bottom line, and, for humans, the bottom line is death. I respectfully disagree. It is not the “capitalists” who are the mean, bad wolves, as the same pattern was true for the communists. The lead members of the communist party were never equal with the working class, and they did live a way better lifestyle. Fidel Castro is one of the wealthiest man in Cuba, and you cannot call Cuba a capitalist country. China is also… Read more »
Öcsi
Guest

Spectator wrote: “Some may say, that for such and such salary let me be “exploited” – the principle still the same, even with seven digit income – if you get well paid, you certainly produce multiple times as much profit to your employer, that’s the point.
Remember, if you feel good and live comfortably, you perform better too, only the straightforward, honest to God interest what counts, not you as a person.

To make it clear, I live in such system too, quite well, thank you, but this is how it works, as I see it.”
——–
Ah, I’m all right Jack! Thanks for asking.

That attitude is very well described in the Urban Dictionary:

“Attitude of ‘every man for himself, survival of the fittest, devil take the hindmost’, … but also, that all the possible advantages (however gained), success (however won) and satisfaction (whatever the cost to others) belong to me first!’ Narrow-focus, narrow-gauge pseudo-Darwinian selfishness glorified as a sensible philosophy of society and life.”

I couldn’t have said it better myself.

Guest

I just returned from a Sunday drive through the villages of Zemplen. The roads there are in a worse condition than I have ever seen. I have been there almost every year since the early seventies. I am tempted to believe that the multitude of potholes has something to do with the priorities of the present regime as opposed to those of the Kadar regime.

Member
Öcsi : Spectator wrote: “Some may say, that for such and such salary let me be “exploited” – the principle still the same, even with seven digit income – if you get well paid, you certainly produce multiple times as much profit to your employer, that’s the point. Remember, if you feel good and live comfortably, you perform better too, only the straightforward, honest to God interest what counts, not you as a person. To make it clear, I live in such system too, quite well, thank you, but this is how it works, as I see it.” I couldn’t have said it better myself. I bet you could’t. Very sad. You have no idea how much these people give back. They maybe the ones delivering water right now to a roma community in Ozd, where the authorities closed rhe water supply in the heatwave. This the problem with Marx. This good guy bad guy view of humanity based on paycheck. That’s why Marxism is meanest bullshit in history. Regarding Kornai’s “I dabbled in Marxism, how come they never occured to them what happens if people don’t want it. Say they want to keep their properties … After decades of… Read more »
Member

Deng. This was a response to Ocsi’s Urban Dictionary quote not Spectators. I agree with spectator.

Sorry, my iPhone fooled me.

Minusio
Guest
It’s really interesting to see how worldviews (“Weltanschauungen”) clash over this topic and how long many comments are, including this one… The discussion about it seems to me much more typical for former Soviet satellite countries than for Western countries where capitalism is so much taken for granted that nobody uses the term anymore except for some far-left parties (Die Linken in Germany, the hard-core socialists in France) or young socialdemocrats (Jusos) in several countries. These form a political periphery. As for it’s shortcomings, I’d like to paraphrase one of Churchill’s sayings about democracy: Capitalism is by far the worst form of an economy – except for all others. In Germany the economic system is called a “social market economy”, and in the German constitution it says property entails obligations (“Eigentum verpflichtet.”) The emphasis on both social content and the contribution of the rich is continually changing and requires political debate and balancing all the time. Just like most people are too young to have seen the EU and its predecessors being founded and for what reasons, people who were born around the 1980s know so little about socialism – and that it really existed! – that they honestly regard… Read more »
gdfxx
Guest
Mrs KKA: “The point I was trying to make is that it is not the systems that are bad, but the practitioners. And, that is true for every system, be it capitalism, socialism, or any other ism you care to name. They may all look great on paper, at one time or another, but when it comes time to walk the walk, greed just raises its ugly head and puts a screeching halt to the nice bits. As far as capitalists being great philanthropists is concerned, if you took away the tax breaks involved, I believe that philanthropy would go the way of the dodo. Call me cynical, but that’s the truth of the matter.” Greed indeed exists, it seems to be part of human nature. Still, based on history, capitalism is the only system that produced some progress and survived for centuries. As far as philanthropy only being fed by tax advantages, reality contradicts that statement. Several very wealthy people gave or are in the process of giving away ALL their wealth. Carnegie comes to mind or Gates. I doubt that in either case their tax bill comes close to their giving. But even if this weren’t true, what’s… Read more »
Member
Now back on the laptop … What I wanted to say is that Marxism needs to peg certain people as evil otherwise the whole system just doesn’t work. This is what keeps baffling marxists for more then a century. The world is just not evil. Sorry for the typos in my previous post. I was out in the woods with my dog. I was punching in the post on my phone while my dog was trying to convince a raccoon to give up his hole for the greater good (it didn’t work – the raccoon refused). The poor dog deserves a bit of freedom to live by his instincts because last night I used some cut rate ear cleaner on him and he was shaking his head the whole night like Johnny Boy on the Hungarian Spectrum. This morning we flushed the ears out with clean cold water from the garden hose and he seems to be ok now. I wonder this would work on Johnny Boy and the other FIdesz belivers … Does he have big floppy ears? Speaking about Johnny Boy … and Professor Kornai. What I like in Johnny Boy is this occasional honesty. I hope he… Read more »
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