1An outstanding thinker has gone. János Kornai’s death represents a great loss for political economy and social sciences. His life work, extending on six decades of two centuries and tremendous historical transformations, represents as such a formidable contribution for understanding the modern world. Among a prolific and consistently original production, three genuine masterpieces stand out, Anti-Equilibrium (1971), Economics of Shortage (1980), The Socialist System (1992).
It is not an exaggeration to count him in the small list of true classic intellectuals, whose work has marked entire periods and will remain as a reference in the future. The present note modestly gives a few remarks on Kornai’s thought, on the occasion of Amartya Sen’s discussion of « Marx after Kornai » (Sen, 2021).
2Amartya Sen underlines Kornai’s distinctiveness by stressing his relation to the values of equity, efficiency, and freedom. While Kornai referred to the traditional distinction between positive and normative approaches and presented a significant part of his work as essentially positive, he wrote many contributions on the normative assessment of economic or social realities and developed a distinctive position in this respect. Faced to his defense of diverse and possibly contradictory values, we find different figures of normative assessment in Kornai. Echoes of his lasting and friendly exchanges with Sen are heard here, but he stressed the conflictual dimension of axiological stances.
3Amartya Sen has shown how inconsistent was the traditional neoclassical and utilitarian theory of social choice. In his grand work he pursues a general approach that would integrate the values of freedom, equity, democracy, and efficiency. Kornai had on such questions a fairly sceptic and sober attitude. Let us mention three positions: dilemmas leading to the quest for compromises, maintaining two different scales of evaluation that may have opposing conclusions, and lexicographic ordering with absolute primacy of one ultimate value.
4In Contradictions and dilemmas (1986), Kornai wrote that we are faced with inescapable dilemmas resulting from the conflict of different value systems. For instance, « there is a contradiction between the efficiency conditions on the one side, and the ethical principles of solidarity and security on the other. » (Kornai, 1986, p. 132) With his well-known image of the supermarket he criticized the notion of an optimal economic system as naive and said that all real economic systems are organic wholes, containing good and bad features. They consequently constitute « package deals », it is not possible at will to choose only the beneficial and to exclude the detrimental components of different systems – as unemployment for capitalism and shortage for socialism. He concluded with a kind of impossibility theorem:
It seems to me that it is impossible to create a closed and consistent socioeconomic normative theory which would assert, without contradiction, a politico-ethical value system and would at the same time provide for the efficiency of the economy. It is impossible if that theory seeks to be realistic and wishes to take into account the true behavioural characteristics of people, communities, organisations and social groups. (Kornai, 1986, p. 137)
5A task of research was to find an answer to the question: « what compromises between the different normative principles are brought about by the social forces of the different social systems »? (ibid., p. 137-138).
6Keynes had a similar attitude, when in « The end of laissez-faire » (1926) he insisted on distinguishing the assessment of capitalism from the point of view of comparative economic efficiency or from a moral perspective. These two approaches led to opposing conclusions in his eyes, and he famously stated that acceptable compromises had to be searched for: « Our problem is to work out a social organisation which shall be as efficient as possible without offending our notions of a satisfactory way of life. » (Keynes, 1926, p. 294)
7A second stance in Kornai is linked to the idea that you cannot add up or aggregate the different assessments of diverse phenomena to reach a kind of unified utility function (Kornai, 2013a). He gave in 2006 a quite unique appraisal of the experience of the great transformation in Central and Eastern Europe: in a long-term perspective, it was for him a success as a swift and peaceful historical change that took place in the direction of the main tenets of Western civilization, capitalism, and democracy, but in an existential and middle term perspective for the populations who went through numerous hardships it represented a failure. « I keep two accounts and not one, and do not merge them. On one account, I gladly acknowledge a great success at the level of world history: a system was created superior to the former one, without bloodshed, with incredible speed. On the other account, I have the list of good and bad experience in everyday life; much joy and much pain. I consider it both sensible and defensible to say that what has happened in this region can be simultaneously considered a success in terms of its global historical significance, and a failure in many important aspects because it caused pain, bitterness and disappointment for so many people. » (Kornai, 2006a, p. 241) His moral reflections in his autobiography also contained an analogous view – where he hinted with irony at a « methodological advance » – about the assessment of personal life actions: « I do not believe that the wrongs done by a person in one stage of his or her life can be righted by useful service to humanity in another stage. We need at least two accounts here. In one the wrongs indelibly remain, but we must of course strive to gather as many and as effective a body of good deeds in the other account. » (Kornai, 2013a, p. 10; 2006).
8Thirdly, we also find a distinctive judgment – at some variance with the dilemma and compromise view – that could be coined Kornai’s axiological primacy of the political. He dismissed as « repugnant » the tradeoff that some posit between democracy and growth for China, being disposed to renounce the former for the benefit of the latter (Kornai, 2014, p. 11). He put forward his lexicographic ordering of preference between ultimate values. « Of primary value are democracy and the values closely tied to it, such as respect for fundamental human rights. Abandoning those cannot be compensated for with material goods, faster growth, or great welfare. There is no tradeoff whereby it would be “worth” sacrificing a slice of democracy for a rise in GDP ». The principal standard is the rule of a democratic regime. « If that requirement is met (or approximately met), then and only then can we start to weigh the secondary, tertiary etc. criteria. And if the assessment has reached that point, it becomes possible to consider tradeoffs among the secondary, tertiary, etc. criteria. » (Kornai, 2013a, p. 9)
9Kornai’s approach of democracy had a specific tone. He usually referred to a minimalist and procedural definition inspired by Schumpeter, underlining the dismissible character of the government:
A “democratic minimum” is fulfilled if a government of a country comes into power as a result of a competition for the votes of the citizens and can be removed from office within the framework of a civilized process without a palace putsch, military coup, assassination, or revolution. (Kornai, 2006a, p. 215)
10On the relation between capitalism and democracy, Kornai moved away from Schumpeter, who thought democracy could evolve outside capitalism. His essential point was that « capitalism is a necessary, but not sufficient condition of democracy » (ibid., p. 217). We observe that he did not attempt to develop the theoretical reasons for such a thesis, it was for him, as it were, a conclusion derived from historical observation. A similar position may be seen in his 1990 article where he asserted the historical strong links between private property and market coordination on one hand, and between state property and bureaucratic coordination on the other, as another argument against market socialism that would attempt to combine state ownership and market coordination – a case of « weak links » (Kornai, 1990).
11Beyond Kornai’s courageous and early critique of the decline of democracy and the shift to autocracy in Orbán’s Hungary, we see that his last great study published was dedicated to the evolution of political regimes in the capitalist post-socialist world, where he found about one tenth of the population living in democracies and nine tenth in autocracies and dictatorships (Kornai, 2016b).
12Amartya Sen discusses the relation of Kornai to Marx, focusing on the questions of equity, power, and freedom. We observe that Kornai abandoned marxism in the 1950s, defined himself as an anti-marxist in the last decade, and stated that in his eyes Marx had a responsibility in Bolshevism and Stalinism (Kornai, 2009). But his relation to Marx’s thought cannot be reduced to such statements. Theoretically, the latter remained a major influence on Kornai’s Weltanschauung. In his article « Karl Marx through the eyes of an East-European intellectual » he wrote:
I sought to integrate various schools of thought. If forced to name those who have influenced me most, I mention the names of Schumpeter, Keynes and Hayek, but first on the list comes the name of Karl Marx. (Kornai, 2009, p. 982-983)
13The author of Capital was at once an economist, a sociologist, a political scientist, and a historian; he « was the great pioneer and incomparable practitioner of the system paradigm ». Alluding to his contrasting view of socialism as a shortage economy and capitalism as a surplus economy, he also notes: « I learned mainly from Marx how important it is to study and explain the persistent deviations from market equilibrium » (ibid., p. 982). The Socialist System, published in 1992, presents grand dynamics of socialism with its emergence, institutional forms, development, laws of motion, and eventual crisis and collapse, which have a decisive and unique marxian flavour.
14In a friendly comment, Sen imagines what could have happened if Kornai had taken up Marx’s line of thought and expanded it in the direction of « incentive compatibility », about distribution questions. However, while Kornai generally characterized high inequalities as a feature of capitalism, and mentioned equity on his list of important values, he often opposed what he saw as marxist or populist views on this topic. The conservative colour that Sen disliked in the american title of The Road to a Free Economy (1990), was seen in his attitude towards income inequalities. In his Essays on the Nature of the Capitalist Economy, he underscored in a schumpeterian spirit the innovation impulse and resulting dynamism as great positive characteristics of capitalism and viewed the « huge rewards » expected by potential innovators as a necessary incentive for risk-taking (Chavance, 2015). After the 2008 financial crisis, when public opinion was « upset by skyrocketing earnings of many business people and top managers », and demanded measures against such tendency, he asserted: « Although the anger is morally justified and psychologically understandable, nevertheless an (unpopular) caveat is needed. » How difficult it would be to imagine « the work of an honest and competent jury […] able to draw the line between a well-deserved and an undeservedly high reward. I am not prepared to propose a practical decision, but just want to draw the attention to the two (mutually contradictory) aspects of very high business income. » (Kornai, 2013b) This attitude was reinforced in the irritated critique he made of Piketty’s Capital in the Twenty-First Century (Kornai, 2016a), an article where the financialization of capitalist economies was genuinely understated. Generally he was sceptic about « Robin Hood measures » in terms of high incomes taxation, and favoured improving distribution through equality of opportunity by means of education (Kornai, 2010).
15It is all the more striking to see how in his last publication, as Amartya Sen observed, the great thinker somewhat altered his general historical and theoretical assessments. Recalling his expectations in Hungary in 1956, in view of all further historical developments, he had a disillusioned and bitter thought.
Now I see that my expectations about the benefits to come from capitalism and democracy were unrealistic. More than six decades later, the image formed in me is much more sober. I know how much injustice and inordinate income-inequality is born of capitalism. The institutions of democracy are unable to prevent the abuse of power and corruption, albeit to different degrees in different countries. (Kornai, 2021)
16János Kornai gained a large recognition in different strands of economic thought. His work always aroused interest and debates, including of course criticism. Usually, he did not enter directly in controversies with his opponents, but later modified his ideas if he recognized value in their commentaries. The respect he obtained from his followers and his critics alike was a consequence of his intellectual and moral integrity.
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