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.

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 sources of Viktor Orbán’s ideas on the world economy

Practically everything that has aroused my interest in the last couple of days is connected in one way or the other to Tusnádfürdő/Baile Tusnad or, as the organizers call it, the “free university” Tusványos. It is a made-up word. Originally, these gatherings were held in Bálványos/Cetăţile Păgânilor, but the festivities over the years have grown so much that they had to move to Tusnádfürdő. Hence the name.

I wrote a couple of times about a commentator who calls himself Elek Tokfalvi, a mirror translation of Alexis de Toqueville. He is an erudite fellow and a sharp-eyed observer of political developments. This time Tokfalvi found a sentence in Viktor Orbán’s speech at Tusványos that prompted him to do a little research. The sentence followed Orbán’s running commentary about the great powers and their exploitation of the smaller ones on the periphery. The sentence reads: “Jenő Szűcs, an author who was very much in vogue about twenty or twenty-five years ago, wrote about this very clearly when he put together a popular treatise on the centers of the world economy and their peripheries.”

I myself didn’t catch this particular sentence when I listened to Orbán’s speech but I sure got a shock when I saw it in print. First, Jenő Szűcs was a historian of Hungarian medieval history who didn’t “put together” popular works. In fact, I clearly remember when I bought one of his works in Hungary and showed it to my father. His first reaction was that Szűcs’s style was so “scientific” that it took mental effort even for a well read and intelligent man like my father to comprehend what the slim volume was all about. I think the title itself is telling: A nemzet historikuma és a történetszemlélet nemzeti látószöge (hozzászólás egy vitához) (History of the nation and the national vision of the view of history, remarks to a debate). His works were appreciated by his colleagues but “in vogue” he was not.

Then there is the problem of dates. Jenő Szűcs died in November 1988, so he couldn’t have written anything twenty or twenty-five years ago. Orbán might conceivably have referenced an article Szűcs wrote in 1980 in the samizdat volume published in honor of István Bibó. The title of the article was “Vázlat Európa három történeti régiójáról.” A year later it also appeared in Történelmi Szemle. But the “Sketch of the three historical regions of Europe” had nothing to do with great centers of the world economy or their peripheries. It was an attempt to portray the region lying between Eastern and Western Europe as a distinct entity that has been different for at least the last thousand years. I for one don’t think that this was a revolutionary discovery, but Hungarian historical circles were impressed.

So, if Jenő Szűcs wasn’t Orbán’s source, who was? Tokfalvi suggests Immanuel Wallerstein, an American Marxist “sociologist, historical social scientist and world-systems analyst.” Apparently in the 1970s Wallerstein was not only translated into Hungarian but very much appreciated by the party leadership. He called the satellite countries “half peripheral” because he saw their centralized planned economic policies as vehicles of true convergence. Thus Wallerstein gave his stamp of approval to the totally mistaken economic policies of the socialist countries. Tokfalvi thinks that Wallerstein is the most likely candidate for Viktor Orbán’s Jenő Szűcs “in vogue.”

Over his career Wallerstein adopted some basic Marxist doctrines: the dichotomy between capital and labor and the view that world economic development is a dialectical process that goes through such stages as feudalism and capitalism. He believes in something called “dependency theory,” which leads straight to the notion that resources flow from a periphery of poor and underdeveloped countries to a “core” of wealthy states, enriching them at the expense of the poor countries. He is one of the leading figures of the anti-globalist movement.



It is becoming increasingly obvious that Viktor Orbán and his college friends are truly the children of the late Kádár period, together with all its ideological baggage. Orbán, when he espoused Wallerstein’s theories at Tusványos, must have noticed that he was flirting with Marxist clichés and felt compelled to preface this particular passage about “the core and the periphery” with the claim that he is not a “vulgar Marxist.” Even his stress on the value of labor that produces only tangible products is suspect. It might be a less than a perfect understanding of Marx’s labor theory. I wouldn’t be at all surprised if that were the case because I know from personal experience as well as from the stories of others that Hungarian college students didn’t take their compulsory course on “political economy” very seriously.

This discussion will be a good introduction to a book review I have been planning to write on a new book by János Kornai called “Gondolatok a kapitalizmusról” (Thoughts on Capitalism). Included in this volume is an essay entitled “Marx egy kelet-európai értelmiségi szemével” (Marx through the eyes of an Eastern European intellectual.” The very last sub-chapter’s title is “Ami tovább él Marx tanaiból” (What still lives from the teachings of Marx).  Certainly not what Viktor Orbán is talking about.