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 / http://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.”

The zeal of Viktor Orbán: Where will it lead?

In some respects the present political leadership reminds me more of the Rákosi regime than of the Kádár period. Before someone jumps on me, let me emphasize the words “in some respects.” First and foremost, I think of the zeal with which the Orbán-led political elite began to rebuild society. This entailed a radical change of everything known before. The Fidesz leadership seems to be very satisfied with the results. Just the other day László Kövér claimed that under their rule all the nooks and crannies of society that had developed since the regime change of 1989-90 were reshaped. Everything that came before 2010 had to be altered in order to build a new Hungary.

The last time we saw such zeal was in the late 1940s and early 1950s when the communists wanted to turn the whole world upside down or, to use another metaphor, to wipe the slate clean. As one of their songs promised: “we will erase the past.” And they began in earnest. They wanted to build an entirely new political system–immediately.

Such attempts usually fail because such rapid change cannot be achieved without ransacking the economy. If one lets the experts go for political reasons and fills their positions with people who finished at best eight grades, the results are predictable. If you get rid of the former manager of a factory because he is deemed to be reactionary and you hire a worker without any experience in management to run the newly nationalized factory, we know what will happen. And indeed, in no time the Hungarian economy, which had recovered after the war with surprising speed, was in ruins. Food rations had to be reintroduced in 1951 or 1952.

This is the same kind of zeal that one sees with the Orbán government. Only yesterday Tibor Navracsics proudly announced that in three years they managed to pass 600 new laws. He added–because Orbán and company can certainly compete with Rákosi and his gang when it comes to bragging–that these laws are of the highest quality. In fact, legal scholars are horrified at the poor quality of the legislative bills pushed through in a great hurry with last-minute amendments.

By contrast János Kádár, who became the first secretary of the Hungarian Communist Party (at that point called Magyar Szocialista Munkáspárt), moved slowly, hoping to gain acceptance after the failed uprising. In fact, the whole Kádár period was known for its cautious, deliberate move toward a less oppressive regime. It was still a dictatorship but it was based on an understanding with the citizens who were ready to make some political compromises in exchange for a better life. By the 1980s, although there were some taboo topics,  intellectual freedom was greater than in any of the other satellite countries.

Intellectual freedom. Unfortunately the present political elite’s attitude toward literature and art greatly resembles that of the Rákosi era when there was a long list of forbidden books and when, as far as art and literature were concerned, socialist realism was the only accepted form. The situation today is not very different. The government supports art and literature that is “national.” Modernity is out and the nineteenth-century classical style is favored. Fidesz politicians on both the local and the national level make sure that only theater directors who cater to their taste are appointed. The very successful director Róbert Alföldi lost out in his bid to continue with his work at the National Theater to a man who talks about the National Theater as a sacred place that he plans to have blessed by a Catholic priest. The plays he is going to stage are mostly written by Hungarian authors. The emphasis is on Hungarian, not on quality.

I could easily be charged with overstating the similarities between the two leaders and their governments. For instance, one could retort, don’t compare the poverty of the Rákosi regime to that of today. But don’t forget that in the late 1940s and early 1950s Hungary was still paying war reparations to Russia while today Hungary is getting handsome subsidies from the European Union. Believe me, without that money Hungary would not be able to meet its financial obligations. Another difference is that today there are still large foreign companies in Hungary which by the way are practically the only source of Hungarian exports. Without them the country would be in even greater economic trouble than it is now. However, Viktor Orbán is working hard to take over some of the foreign companies and banks. And if he continues with his onerous tax policy, the owners of these businesses will most likely be glad to sell to a state that seems more than eager to take them over and that, so far at least, has not balked at overpaying.

Viktor Orbán as a blogger sees him / ellenallas.blog

As for the clientele of the two regimes. The Hungarian communists in 1948 and afterwards wanted to obliterate the old upper and even lower middle classes and give power to the working class. The better-off peasantry was also considered to be an enemy of the people. They made  no secret of the fact that they wanted a complete change: those who were on the top would be at the bottom and the poor peasants and workers would be on top. They didn’t even try to hide their intentions. Orbán is undertaking the same kind of social restructuring, albeit with different winners and losers. His goal is a complete change of not only the business but also the intellectual elite. Those who sympathize with the liberals or the socialists will be squeezed out and politically reliable Fidesz supporters will take their place.

People I know and whose opinion I trust tell me that Magyar Televízió and Magyar Rádió had more balanced reporting in the second half of the 1980s than they do today. This is where Hungary has ended up after three years of frantic Fidesz efforts to remake the country.

András Bruck in a brilliant essay that appeared a few days ago in Élet és Irodalom insists that despite appearances Hungary today is a dictatorship because what else can one call a system in which every decision is made and put into practice by one man? And what is really depressing, says Bruck, is that the dictatorship prior to 1989 was forced upon Hungary by Soviet power. Today there is no such outside pressure. Hungarians themselves gave Fidesz practically unlimited power and for the time being show no signs of wanting to get rid of Viktor Orbán and Fidesz. In fact, 1.5 million people are devoted to him and in a nationalist frenzy are ready to fight against the colonizers of the European Union. A shameful situation.