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The economics of socialism as economics of shortage. A critical review
Authors:H -J Wagener
Institution:(1) University of Groningen, The Netherlands
Abstract:Summary The article is an extended review of J. Kornai’sEconomics of Shortage. Salient feature of this book is a behavioural in place of a decision-theoretic approach to socialist economies. The article discusses central concepts of Kornai’s analysis as hard and soft budget constraints, shortage and slack, taut plans, sellers’ markets. The main hypothesis says that the achievements of socialism, work guarantee and redistribution, bring about soft budget constraints and thus cause shortage. It is argued, however, that existing socialist systems have ample leeway for economic reforms. Review article of J. Kornai, Economics of Shortage, Vol. I and II, North-Holland Publishing Company, Amsterdam and New York, 1980. Pp. XVII + 650. 2-Volume Set Dfl. 170,-.
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