“Market Socialism” and “Free Economy”

“Market Socialism” and “Free Economy”

An attack on “market socialism” is now coming from a number of East European economists, converts to free-market ideology, who usually express regret at their own “naive” illusions of earlier times about the
“reformability” of Soviet-type “socialism.” A leading exponent of these ideas is Janos Kornai. He expresses his views systematically and cogently in The Road to a Free Economy (W.W. Norton & Co., New York, 1990). (The original Hungarian title was “A Passionate Pamphlet in the Cause of Economic Transition.”) Its basic argument is that there is no “third way,” no viable alternative to Western capitalism in one of its several forms, once one rejects Soviet-type “socialism.” The experience of Hungary shows particularly clearly the failure of attempts to combine public ownership and marketization. So anything like “market socialism” is, in his view, a chimera. It cannot work. True, he points out that the
Western model comes in many varieties: Sweden, the United States, and Japan differ in many ways. However, for him they share the characteristic that the bulk of the means of

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