Reforming the Economies of Eastern Europe

Reforming the Economies of Eastern Europe

For over thirty years the Hungarian economist Janos Kornai has been a sophisticated analyst of the communist command economies. His writings have been characterized by a mixture, rare among economists, of rigor, skepticism, and sympathy. Until recently Kornai rejected the orthodox economics of both East and West, which claimed that either central planning or the free market was the answer for whatever problems plagued the economy. An example is Kornai’s remarkable 1982 lecture “The Health of Nations,” from which I quote at length because it is an interesting contrast to his new book:

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