János Kornai: economics, methodology and policy

Abstract

Abstract Kornai is an iconoclastic economist who developed an economic systems paradigm and applied it to the Leninist-Stalinist socialist system.His ideas overlapped with Marxism, with the Austrian school, with the Cambridge Social Ontology Group (CSOG), with Keynesianism, and with evolutionary economics. However, despite rejecting much of mainstream economics, Kornai did not retire to a heterodox bunker. Important results of his application of the systems paradigm were a rejection of market socialism, a rejection of price increases as a solution for shortages in the Leninist-Stalinist socialist system, and advocacy of a privatisation policy based on providing favourable conditions for the development of new private enterprises.