From Marx to the Chinese Economic Miracle – Special Issue of Kornai was Presented

Well-known American professors and also a Nobel Prize-winning economist took part in an online discussion organised for the presentation of the Public Choice special issue about János Kornai.

 Public Choice, a major journal of political economy, published a special issue in April that deals entirely with the work of János Kornai. The editors of the prestigious international journal decided to publish the special issue because they believed that, compared to their importance in economics and social sciences, Kornai’s works and thoughts had so far received little attention from public choice scholars. The online discussion organised by the Department of Comparative and Institutional Economics in honor of Kornai, professor emeritus with Corvinus University of Budapest, was listened to by 162 people who joined in from many parts of the world, from the United States through Europe to Asia, in order to listen to world-renowned speakers, including Amartya Sent, a Nobel Prize-winning economist at Harvard University. 

William F. Shughart, editor-in-chief of Public Choice journal, said it was a very rewarding task to organize the special issue on Kornai, as Kornai’s work has had such an impact to this day that it has not been difficult to put together a prestigious team of authors for the task. “We had, in special issues, also dealt with topics such as corruption, healthcare, or real estate leasing, but I think this is one of our best special issues since 2005, when I became head of the journal” – Shughart said, speaking from the United States. 

He highlighted János Kornai’s biographical text on 1956 and the discourse between Kornai and his Nobel Prize-winning colleague and friend, Amartya Sen, on the role of Marx. 

Hayek rather than Keynes

Mehrdad Vahabi, professor with Sorbonne University in Paris, highlighted how honoured he was to be the guest editor of the special issue and then presented in detail the structure of the journal. The 15 studies have one thing in common, each is about Kornai’s importance in economics and social sciences. The special issue can be divided into three separate units. The studies in the first part are about Kornai’s career and his main inspirations, the texts in the second part react to the most important works and theories of Kornai, while the studies in the third part are about the application of Kornai’s most important theories to current topics. 

In his introduction, Vahabi analyzes how much the authors whom Kornai names as his own sources of inspiration have influenced Kornai’s thinking. According to Vahabi, the works of Keynes and Schumpeter did contribute to Kornai’s thinking, but it was even more influenced by the works of Marx and Hayek. 

Nobel Prize-winning economist Amartya Sen had written one of the most memorable texts, titled “Marx after Kornai”, in the special issue. Sen writes about why it is unavoidable to study Kornai when one is researching Marx and the theoretical foundations of socialism. At the presentation of the special issue, Sen explained how much he had learned during his career from Kornai, with whom they had always been in agreement that ”economics is never really about technical details, but about the bigger picture behind the context”.

 
Why China has not become a democracy? 

Gerard Roland, professor with Berkeley University, presented their joint study with Yuri Gorodnichenko, in which they explored the question of why the Chinese state structure has not been democratized despite its significant economic development. In their research, they came to the conclusion that the more individualism prevalent within a society, the more likely a society is to be democratized; however, collectivist culture can be a good breeding ground for a dictatorial state. Roland also noted that non-democratic societies have so far been less researched, so this task awaits present and future academics. The study concluded that if modernization theory is supplemented with a cultural dimension, it turns out that economic development does not necessarily go hand in hand with democratization. 

Peter Boettke, a prominent figure in the Austrian school, briefly presented their joint study with Rosolino Candela, which explores how soft budget constraint as well as deficit, a recurring feature of socialist systems, can be interpreted through the teachings of the Austrian school. In his presentation, Boettke highlighted that one of the reasons for the evolution of soft budget constraint in the socialist system is competition between companies not interested in making profits. 

Peter T. Leeson, professor with George Mason University, presented his study authored together with two of his colleagues: they transposed Kornai’s theory of soft budget constraint to Kenya’s land privatization programme in the 1960s and 1970s. They examined how a measure publicly known to be aimed at equality in wealth and creating a market causes further impoverishment of the poor and destroys wealth and values within a society; and, to help understand this, they used Kornai’s theory of soft budget constraint. 

At the end of the event, János Kornai, 93, who had listened to all the lectures, said that it was a great honour for him that Public Choice had dedicated a special issue to his work and that the presentation of the issue was realized by attracting such keen interest. Closing the event, he drew attention to China’s geopolitical expansion and the moral responsibility associated with such an influence. Arguing with Amartya Sen, he said that, in his view, Marx had a responsibility in enabling the evolution of the soviet system, just as he must reckon with the fact that China, now pursuing a harder policy, has risen economically, to which Bashan’s advices given at the conference have contributed.