János Kornai
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János Kornai (21 January 1928 – 18 October 2021) was a Hungarian
economist An economist is a professional and practitioner in the social sciences, social science discipline of economics. The individual may also study, develop, and apply theories and concepts from economics and write about economic policy. Within this ...
noted for his analysis and criticism of the command economies of
Eastern Europe Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
an
communist state A communist state, also known as a Marxist–Leninist state, is a one-party state in which the totality of the power belongs to a party adhering to some form of Marxism–Leninism, a branch of the communist ideology. Marxism–Leninism was ...
s. He also covered
macroeconomic Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output/ GDP ...
aspects in countries undergoing post-Soviet transition. He was emeritus professor at both
Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...
and
Corvinus University of Budapest Corvinus University of Budapest () is a private university, private research university in Budapest, Hungary. The university currently has an enrolment of approximately 9,600 students, with a primary focus on business administration, economics, ...
. Kornai was known to have coined the term shortage economy to reflect perpetual shortages of goods in the centrally-planned command economies of the
Eastern Bloc The Eastern Bloc, also known as the Communist Bloc (Combloc), the Socialist Bloc, the Workers Bloc, and the Soviet Bloc, was an unofficial coalition of communist states of Central and Eastern Europe, Asia, Africa, and Latin America that were a ...
.


Biography

Kornai was born János Kornhauser on 21 January 1928 in
Budapest Budapest is the Capital city, capital and List of cities and towns of Hungary, most populous city of Hungary. It is the List of cities in the European Union by population within city limits, tenth-largest city in the European Union by popul ...
in a well-to-do Hungarian-Jewish family. The family spent time in an
internment camp Internment is the imprisonment of people, commonly in large groups, without Criminal charge, charges or Indictment, intent to file charges. The term is especially used for the confinement "of enemy citizens in wartime or of terrorism suspects ...
during the Nazi occupation of Hungary. His father was sent for slave labour and later killed at Auschwitz. Kornai studied
philosophy Philosophy ('love of wisdom' in Ancient Greek) is a systematic study of general and fundamental questions concerning topics like existence, reason, knowledge, Value (ethics and social sciences), value, mind, and language. It is a rational an ...
for two years at Pázmány Péter University (now
Eötvös Loránd University Eötvös Loránd University (, ELTE, also known as ''University of Budapest'') is a Hungarian public research university based in Budapest. Founded in 1635, ELTE is one of the largest and most prestigious public higher education institutions in ...
) in Budapest. Kornai gained his knowledge of
economics Economics () is a behavioral science that studies the Production (economics), production, distribution (economics), distribution, and Consumption (economics), consumption of goods and services. Economics focuses on the behaviour and interac ...
on his own, and later held a candidate degree in the field from the Hungarian Academy of Sciences. He wrote that he chose to be an economist after reading
Marx Karl Marx (; 5 May 1818 – 14 March 1883) was a German philosopher, political theorist, economist, journalist, and revolutionary socialist. He is best-known for the 1848 pamphlet '' The Communist Manifesto'' (written with Friedrich Engels) ...
's ''
Das Kapital ''Capital: A Critique of Political Economy'' (), also known as ''Capital'' or (), is the most significant work by Karl Marx and the cornerstone of Marxian economics, published in three volumes in 1867, 1885, and 1894. The culmination of his ...
''. François Fejtő, "Les Mémoires politiques et intellectuels d'un grand économiste hongrois", ''Sociétal'', Q1 2008, p. 110 ff. He started working on '' Szabad Nép,'' the Hungarian Communist Party newspaper, and rose to be editor for news related to the economy, but he was fired for lack of
Communist Communism () is a sociopolitical, philosophical, and economic ideology within the socialist movement, whose goal is the creation of a communist society, a socioeconomic order centered on common ownership of the means of production, di ...
convictions in April 1955. From 1958 onwards, Kornai received many invitations to visit foreign institutions, but was denied a
passport A passport is an official travel document issued by a government that certifies a person's identity and nationality for international travel. A passport allows its bearer to enter and temporarily reside in a foreign country, access local aid ...
by the Hungarian authorities and forbidden to travel until 1963, after political restrictions had begun to ease. From 1967 to 1992, Kornai was a research professor at the Institute of Economics, Hungarian Academy of Sciences. He became a corresponding member (1976), then a full member (1982) of the Hungarian Academy of Sciences. Kornai joined the faculty of
Harvard University Harvard University is a Private university, private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the History of the Puritans in North America, Puritan clergyma ...
in
Cambridge, Massachusetts Cambridge ( ) is a city in Middlesex County, Massachusetts, United States. It is a suburb in the Greater Boston metropolitan area, located directly across the Charles River from Boston. The city's population as of the 2020 United States census, ...
, in 1986 and was named the Allie S. Freed Professor of Economics in 1992. Retiring from Harvard in 2002, he remained a Distinguished Research Professor at Central European University, and later became a Professor Emeritus at
Corvinus University of Budapest Corvinus University of Budapest () is a private university, private research university in Budapest, Hungary. The university currently has an enrolment of approximately 9,600 students, with a primary focus on business administration, economics, ...
. He was a member of the board of the
Hungarian National Bank The Hungarian National Bank ( , MNB) is the central bank of Hungary and as such part of the European System of Central Banks (ESCB). It was established in 1924 as a successor entity of the Austro-Hungarian Bank, under the economic assistance ...
(central bank) until 2001. In 2018, the Corvinus University of Budapest organized a full-day conference in honour of his 90th birthday. In 2018, he was elected an honorary member of the Széchenyi Academy of Literature and Art. János Kornai died on 18 October 2021 in Budapest, aged 93.


Work

In the late 1950s, he was among those who initiated the use of
mathematical Mathematics is a field of study that discovers and organizes methods, Mathematical theory, theories and theorems that are developed and Mathematical proof, proved for the needs of empirical sciences and mathematics itself. There are many ar ...
methods in economic planning. He elaborated the
theory of two-level planning The theory of two-level planning (alternatively, Kornai–Liptak decomposition) is a method that Matrix decomposition , decomposes large problems of Linear programming, linear optimization into sub-problems. This decomposition simplifies the soluti ...
with Tamás Lipták and directed the first large-scale, economy-wide, multi-level planning project. Professor Kornai's early work ''Overcentralization'' (1956) created a stir in the West and conveyed for the first time his disillusionment with communist
central planning A planned economy is a type of economic system where investment, production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A planned economy may use centralized, decentralized, ...
. His 1971 book ''Anti-Equilibrium'' criticizes
neoclassical economics Neoclassical economics is an approach to economics in which the production, consumption, and valuation (pricing) of goods and services are observed as driven by the supply and demand model. According to this line of thought, the value of a go ...
, particularly
general equilibrium theory In economics, general equilibrium theory attempts to explain the behavior of supply, demand, and prices in a whole economy with several or many interacting markets, by seeking to prove that the interaction of demand and supply will result in an ov ...
. His 1980 book ''Economics of Shortage'' is perhaps his most influential work. It argues that the chronic shortages seen throughout
Eastern Europe Eastern Europe is a subregion of the Europe, European continent. As a largely ambiguous term, it has a wide range of geopolitical, geographical, ethnic, cultural and socio-economic connotations. Its eastern boundary is marked by the Ural Mountain ...
in the late 1970s and continuing in the 1980s were not the consequences of planners' errors or wrong pricing, but of systemic flaws. In his 1988 book ''The Socialist System, The Political Economy of Communism'', he argued that the command economy based on unchallenged control by a Marxist–Leninist communist party leads to a predominance of bureaucratic administration of state firms, through
centralized planning A planned economy is a type of economic system where Investment (macroeconomics), investment, Production (economics), production and the allocation of capital goods takes place according to economy-wide economic plans and production plans. A pla ...
and management, and the use of administrative pricing to eliminate the effects of the market. This brings individual responses to the incentives of the system, culminating in observable and inescapable economic phenomena known as the shortage economy. Kornai remained highly sceptical of efforts to create
market socialism Market socialism is a type of economic system involving social ownership of the means of production within the framework of a market economy. Various models for such a system exist, usually involving cooperative enterprises and sometimes a mix ...
. His later works, including ''The Road to a Free Economy'' (1990), ''Highway and Byways'' (1995), ''Struggle and Hope'' (1997) and '' Welfare in Transition'' (2001), deal with
macroeconomic Macroeconomics is a branch of economics that deals with the performance, structure, behavior, and decision-making of an economy as a whole. This includes regional, national, and global economies. Macroeconomists study topics such as output/ GDP ...
aspects and the interaction between politics and economic policy in the period of economic transition in the
post-Soviet states The post-Soviet states, also referred to as the former Soviet Union or the former Soviet republics, are the independent sovereign states that emerged/re-emerged from the dissolution of the Soviet Union in 1991. Prior to their independence, they ...
. He later led a comprehensive research project, ''Honesty and Trust in the Light of Post-Socialist Transition'' at Collegium Budapest. Kornai was a member of the
Royal Swedish Academy of Sciences The Royal Swedish Academy of Sciences () is one of the Swedish Royal Academies, royal academies of Sweden. Founded on 2 June 1739, it is an independent, non-governmental scientific organization that takes special responsibility for promoting nat ...
. In 2016 he was elected as a foreign associate of the
National Academy of Sciences The National Academy of Sciences (NAS) is a United States nonprofit, NGO, non-governmental organization. NAS is part of the National Academies of Sciences, Engineering, and Medicine, along with the National Academy of Engineering (NAE) and the ...
. In 2007 Kornai published a book of memoirs, ''By Force of Thought'', covering his research and the social and political environments in which he did his work. New editions of some of Kornai's major works appeared in Hungarian from a
Bratislava Bratislava (German: ''Pressburg'', Hungarian: ''Pozsony'') is the Capital city, capital and largest city of the Slovakia, Slovak Republic and the fourth largest of all List of cities and towns on the river Danube, cities on the river Danube. ...
publisher in 2012.Balázs Hámori: "János válogatott művei sorozat a pozsonyi Kalligram kiadásában" (Series of selected works by János Kornai published by Kalligram of Bratislava). ''Közgazdasági Szemle'' LIX, February 2012, pp. 220–228.


See also

*'' Welfare, Choice and Solidarity in Transition'' * Anti-equilibrium theory * Stanisław Gomułka * Socialist economies in theory * Shortage economy


References


External links

*
His own website
{{DEFAULTSORT:Kornai, Janos 1928 births 2021 deaths 20th-century Hungarian economists 21st-century Hungarian economists Writers from Budapest Hungarian Jews Institutional economists Fellows of the Econometric Society Foreign associates of the National Academy of Sciences Foreign members of the Russian Academy of Sciences Fellows of the American Academy of Arts and Sciences Members of the Hungarian Academy of Sciences Members of the Royal Swedish Academy of Sciences Presidents of the Econometric Society Socialist economists Academic staff of the Corvinus University of Budapest Harvard University faculty