Centralization and the capitalist market economy Cover Image

Centralizacja i kapitalistyczna gospodarka rynkowa
Centralization and the capitalist market economy

Author(s): János Kornai
Subject(s): Economy
Published by: Uniwersytet Ekonomiczny w Krakowie we współpracy z Wydawnictwem Naukowym Scholar
Keywords: centralization; decentralization; centralization tendency; vertical co-ordination; horizontal co-ordination, market; capitalism; socialism; Hungary

Summary/Abstract: According to the author, a radical change has occurred in the political structure of the Hungarian state: it is not a democracy any more, but an autocracy. In close relation to this, the article views the damage done to societal and state institutions. Th e author does not call for any changes of emphasis – he is still convinced that the main problem lies in the replacement of democracy by autocracy – but he views his previous conclusions from a diff erent angle: the tendency to centralize. Th e author claims that in most countries, the state and the capitalist market economy coexist in some way. In fact, the relation can be very benefi cial in some cases, despite frictions. On the one hand, state intervention cushions the market’s failures and makes income distribution fairer. On the other, the market fl exibly and eff ectively corrects the government’s mistakes. But these fortunate cases do not refute the general observation that state and market are two diff erent kinds of organism, alien to each other: their coexistence is not easy. Over the last two years, the Hungarian government’s measures have alternated between elements of socialism and capitalism, centralization and decentralization, and state and market activity. As a result, the Hungarian modus operandi fails to profi t from the capitalist system: the propensity for innovation, dynamism, initiative and a spirit of enterprise. At the same time it brings out all the drawbacks inherent in capitalism. Th e government and the market work together to make the income distribution still more unjust; they operate side by side to produce and sustain mass unemployment.

  • Issue Year: 2011
  • Issue No: 16+17
  • Page Range: 5-21
  • Page Count: 16
  • Language: Polish