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The Socialist System : The Political Economy of Communism - Janos Kornai

The Socialist System

The Political Economy of Communism

Paperback

Published: 12th April 1992
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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.

"Kornai's sweeping description, analysis, and condemnation of socialism is impressive... Kornai's work is important for understanding the breakdown of socialist economics."--Journal of Economic Literature

List of Figuresp. xiii
List of Tablesp. xv
Prefacep. xix
Points of Departure
The Subject and Methodp. 3
Specific Lines of Historical Development and General Featuresp. 3
Socialist Countriesp. 4
Interpretation of the Term "Socialism"p. 9
Political Economyp. 11
Positive Analysisp. 12
Modelsp. 15
Evaluationp. 16
Antecedents and Prototypes of the Systemp. 18
Marx's Image of Socialismp. 18
System Prototypesp. 19
The System before the Socialist Revolutionp. 21
The Revolutionary Transition toward the Classical Systemp. 26
The Anatomy of the Classical System
Powerp. 33
The Partyp. 33
The Statep. 36
The Mass Organizationsp. 39
Cohesive Forcesp. 40
Internal Conflictsp. 44
Repression and the Totalitarian Nature of Powerp. 45
Ideologyp. 49
The Official Ideologyp. 49
The Socialist System's Sense of Superiorityp. 50
The Basic Promisesp. 53
The Self-Legitimation and Paternalistic Nature of Powerp. 55
Discipline, Willing Sacrifice, and Vigilancep. 57
Power and Ideologyp. 59
Propertyp. 62
Explanation of the Conceptsp. 62
Some Characteristic Property Forms before the Advent of the Socialist Systemp. 67
The State-Owned Firmp. 71
Other State Property Formsp. 75
The Cooperativep. 76
Private Property and Production Activity of a Private Naturep. 83
Capitalism, Socialism, and Propertyp. 87
Coordination Mechanismsp. 91
Main Typesp. 91
Some Observations on the Main Typesp. 95
Bureaucratic Coordinationp. 97
Market Coordinationp. 100
Self-Governing Coordinationp. 103
Ethical Coordinationp. 105
Family Coordinationp. 106
Spontaneous and Artificial Changesp. 108
Planning and Direct Bureaucratic Controlp. 110
The Precursors of Socialism on the Subject of Planningp. 110
Initial Approach: Elaboration of the Planp. 111
Initial Approach: Plan Implementation and Managementp. 114
The Motivation of Leaders in the Economic Bureaucracyp. 118
Bargaining and Inner Conflictp. 121
Planning, Management, and Politicsp. 124
The Problem of Informationp. 127
Money and Pricep. 131
Bankingp. 131
The State Budgetp. 134
Survey of Money Flowsp. 139
Soft and Hard Budget Constraintp. 140
Income and Price Responsivenessp. 145
Administrative Producer Pricesp. 149
Administrative Consumer Pricesp. 153
Market Pricesp. 155
Nonprice Signalsp. 156
Investment and Growthp. 160
Expansion Drive and Investment Hungerp. 160
Central Allocation and Investment Tensionp. 163
Investment and Consumptionp. 165
Prioritiesp. 171
Extensive and Intensive Methodsp. 180
Fluctuations in Growth; Cyclesp. 186
Measurement of Aggregate Outputp. 193
The System-Specific Growth Type: Forced Growthp. 197
Growth Performancep. 199
Employment and Wagesp. 203
The Road to Full Employmentp. 204
The Development of Chronic Labor Shortagep. 211
Direct Bureaucratic Control of Employment and Wagesp. 216
Employer-Employee Relations in the Factoryp. 218
Bureaucratic and Market Influences on Wagesp. 224
Shortage and Inflation: The Phenomenap. 228
Shortage Phenomena and the Shortage Economyp. 229
The Process of Demand Adjustmentp. 234
Horizontal and Vertical Shortagep. 240
Shortage and Surplusp. 243
Market Regimes: The Buyers' and the Sellers' Marketp. 245
Normal Shortage and Normal Surplusp. 252
Open, Declared, and Hidden Inflationp. 255
Shortage and Inflation: The Causesp. 262
The Behavior of the Firm: Short-Term Decisionsp. 262
The Behavior of the Firm: Long-Term Decisionsp. 268
The Behavior of the Bureaucracy Managing Productionp. 270
Relative Pricesp. 273
Repressed Inflation in Interfirm Relationsp. 275
Repressed Inflation in the Consumer Spherep. 278
Excess Demand on the Macro Levelp. 280
The Propensity to Inflation; the Relationship between Shortage and Inflationp. 283
The Self-Inducement and Reproduction of Shortagep. 286
The System-Specific Nature of the Causesp. 288
Economic Efficiency and Technical Progressp. 292
Consumption and Distributionp. 302
The Growth of Consumptionp. 302
Other Factors in Material Welfarep. 304
Economic Securityp. 311
First Approach: Distribution of Money Incomep. 316
The Distribution of Material Welfare: Other Manifestationsp. 318
The Explanation for the Distributionp. 323
Tendencies toward Equalization and Differentiationp. 331
External Economic Relationsp. 333
The External Political Environmentp. 335
The Institutional System of External Economic Relationsp. 341
Capitalist Relations: Import Hunger, Export Aversion, and Propensity to Indebtednessp. 345
Socialist Relations: Tie-Ins, Export Preferences, and the Pursuit of a Zero Balancep. 351
An Attempt at Integration: The Council of Mutual Economic Assistancep. 355
The Coherence of the Classical Systemp. 360
The Main Line of Causalityp. 360
The Affinity among Elements of the Systemp. 365
The Prototype and the National Variationsp. 368
The Soviet Effectp. 372
Verificationp. 375
The Viability of the Classical Systemp. 377
Shifting from the Classical System
The Dynamics of the Changesp. 383
The Inducements for Changep. 383
The Depth and Radicalism of the Changesp. 386
Reform and Revolutionp. 387
A Chronological Survey of Reforms and Revolutionsp. 392
The "Perfection" of Controlp. 396
General Description of the Tendencyp. 396
Reorganizations on the Upper Levelp. 398
Merger of Firmsp. 399
The Development of Planning and Direct Controlp. 403
Preview: The Organizational Structure under the Postsocialist Systemp. 407
Political Liberalizationp. 409
The Monopoly of Powerp. 409
The Easing of Repressionp. 412
The Constant and Variable Elements in the Official Ideologyp. 414
The Seeds of Pluralismp. 418
Opening toward the Capitalist Worldp. 423
Change in the Scale of Publicity and Candorp. 425
The Limits to Political Reformp. 428
Preview: The Political Structure of the Postsocialist Systemp. 430
The Rise of the Private Sectorp. 433
The Inducements behind the Development of the Private Sectorp. 433
A Survey of the Private Sectorp. 435
The Private Sector and the Official Ideologyp. 444
The Affinity of Private Ownership and Market Coordinationp. 447
The Private Sector and the Bureaucracyp. 450
The Economic Role of the Familyp. 455
Preview: The Private Sector under the Postsocialist Systemp. 459
Self-Managementp. 461
Self-Management as an Intellectual and Political Trendp. 461
Political Relationsp. 463
Economic Effectsp. 466
Relations between Manager and Workersp. 469
Ethical Coordinationp. 470
Preview: Self-Management under the Postsocialist Systemp. 472
Market Socialismp. 474
Ideological Antecedentsp. 474
Generalization from the Historical Applicationsp. 479
Classification of Alternative Strategies for Deregulationp. 480
The Firm's Vertical Dependencep. 482
The Softness and Hardness of the Budget Constraint, and the Firm's Responsiveness to Pricesp. 489
The Affinity between Public Ownership and Bureaucratic Coordinationp. 497
Horizontal Relations of Firms in Public Ownershipp. 500
Proportions of the Two Kinds of Dependencep. 504
The Relation between Publicly Owned Firms and the Private Sectorp. 505
Interaction between the Mechanisms; Assessment of the Changesp. 507
Preview: The State Sector under the Postsocialist Systemp. 511
Price Reformsp. 513
Determination of Product Pricesp. 513
The Principles and Practice of State Price Determination and Fiscal Redistributionp. 521
The Scope and Limits of Price Reformsp. 525
Preview: Prices under the Postsocialist Systemp. 527
Macro Tensionsp. 529
Employment and Wagesp. 530
Growth and Investmentp. 534
The State Budget and Fiscal Policyp. 537
The Credit System and Monetary Policyp. 543
Shortage and Inflation: Internal Economic Relationsp. 548
Foreign Trade and Foreign Debtp. 552
Shortage, Inflation, and Indebtednessp. 558
The Standard of Livingp. 559
Preview: Macro Tensions in the Postsocialist Systemp. 563
Concluding Remarksp. 565
The Depth and Radicalism of the Changes, and the Main Line of Causalityp. 565
The Incoherence of the Tendencies to Reformp. 570
Reforms and Public Sentimentp. 575
Preview: The Socialist System's Legacy and Postsocialismp. 577
Referencesp. 581
Bibliography on Postsocialist Transitionp. 627
Author Indexp. 631
Subject Indexp. 636
Table of Contents provided by Syndetics. All Rights Reserved.

ISBN: 9780691003931
ISBN-10: 0691003939
Audience: Tertiary; University or College
Format: Paperback
Language: English
Number Of Pages: 672
Published: 12th April 1992
Publisher: Princeton University Press
Country of Publication: US
Dimensions (cm): 24.13 x 15.88  x 3.81
Weight (kg): 0.98