TheMarketForIdeas

In Kafka’s novel, Das Schloß [The Castle], there is a gentleman bearing the name “K” who unsuccessfully tries to obtain a hearing with the enigmatic ruler of a bureaucratic citadel dominating, physically and psychically, an alienated village community, to secure a living in that surreal neighbourhood. In Der Prozess [The Trial], a certain Joseph K. gets arrested and accused by an obscure authority for a crime never unveiled, either to him or anyone else (including the millions of readers of the novel). In Amerika [America], the main character, Karl Rossmann, lives a David-Coppefield-ian life within an illusive and deluding “new world”. All three novels are part of the “absurdist literature”, are unfinished and are posthumous. Even though Kafka didn’t experience communism, his novels can be seen as a crude premonition of that epoch. In the present essay we shall speak, however, about three different characters whose names start with the Kafkian effigy “K” and whose professional careers were devoted to the extraction of Eastern Europe from the absurdum of communism: the Polish philosopher and historian of ideas Leszek Kołakowski (1927-2009), the Hungarian economist János Kornai (1928-2021) and the ex-President of the Czech Republic Václav Klaus (b. 1941). 

Leszek Kołakowski: the Solidarność philosopher 

“A modern philosopher who has never once suspected himself of being a charlatan must be such a shallow mind that his work is probably not worth reading.” – L. Kolakowski, “Metaphysical Horror”. 

Everybody knows that the famous “Solidarity” trade union is the disruptive movement that hit like an earthquake the Communist camp not only in Poland, not only in Central and Eastern Europe, but everywhere Communism was malignantly established. The image is associated with Lech Wałęsa, the worker (electrician) who frontally contested the sideslip experienced by the “dictature of the proletariat” and, implicitly, the absurd claim that socialism could ever become the “power plant” of the future society. But maybe less is known about the fact that “Solidarity” had also a philosopher of its own in the person of Leszek Kołakowski, the thinker who, together with Pope John Paul II and other Polish dissidents, formulated the intellectual program of an anti-totalitarian, non-violent, counter-revolution of the working class, that paved the way for the 1989 transformation in the whole former socialist bloc. His work came even though, by his own admission, in his early days, he was seduced by the socialist doctrine. “For any given doctrine that one wants to believe, there is never a shortage of arguments by which to support it”.

Kołakowski became, after Stalin’s death and the sunset of his tyrannical cult, one of the main voices of the “revisionist movement”, with its tentative rebirth of critical reason against rough mythology and its re-rooting of (what could have been saved from) the socialist idea in the respect for individual rights and the rebuttal of the epistemic infallibility of the Party-State. Step by step, Kołakowski’s criticism of socialism, in the name of socialism, evolved naturally into a critique of the “ethical” impossibility of socialism to be socialism, an independent approach echoing unwittingly the “economic calculation” argument. Famous for the trilogy Main Currents of Marxism: Its Origins, Growth and Dissolution (2005) – first published in Polish in Paris in 1976, with the English translation in 1978 –, he managed to upset not only the home-practitioners of the socialist experiment, but also its salon enthusiasts from the Western free intellectual world, with his meticulous critique of the distance, on the one hand, between socialist “theory” and “practice” and, on the other hand, between “theory” and common-sense.

In the three volumes of the Main Currents – I: “The Founders”, II: “The Golden Age”, and III: “The Breakdown” – he travels not only through the mere chronology of the socialist ideas but also through its “biology”. The first tome deals with the foundations of the doctrine, encrypted in the socialist genome written as a software program (one historical “malware”, in fact) by the so-called “classics of Marxism”. The second volume deals with the epoch of full potency and adaptability to the constraints of the environment, with the development of social democracy as a “universal Church” of the post-war West. The third piece finally surveys the potential of Marxism to be reinvigorated (and to become once again deceptive), as well as the chances to be resisted by the humanist tradition of the same West with its inbuilt respect for spiritual life and for unsaleable dignity. Kołakowski’s gradual departure from socialism and from Marxism was not to remain an intimate experience, but an inspirational one. As testified by the reputed political scientist, V. Tismăneanu, in an endorsement to the Romanian translation of the trilogy [NB – own translation]:

“As one who once practiced the breakup with the system by invoking the «Spectres of Marx» against «real socialism», I confess that the readings in Kołakowski counted enormously in my awakening. After leaving [Romania] for the Western world, my departure from any hypostasis of Marxism was directly linked to the Kołakowski model. I admire his humanistic consistency, openness to the universe of religion and the courage to reject any univocal determinism. Like him, I believe that «lie is the immortal soul of communism». The role of the Devil in History is primarily tied to the forgery of Good and Truth. In this sense, Kołakowski’s work represents a gnoseological exorcism.” 

“What Is Left of Socialism?” (1995)

In this short piece written five years after the wave of anti-socialist revolutions, republished in his anthology Is God Happy? (2013), Kołakowski notes that to read Karl Marx remains part and parcel of the economic culture, even though his theories do not really explain the world we live in and cannot be used as a basis for any type of predictions. His works were nevertheless “useful”, being referred to as a means to justify and glorify communism, and the subsequent slavery, and are useful (without quotation marks) especially precisely because his most important prophecies turned up to be false.

Moreover, a series of other issues cannot be addressed and solved with the help of Marx’s theories: regarding ecology problems, he talks vaguely about the unity between man and nature; regarding demographic problems, he ignores them altogether, not believing in the phenomenon of over-population; regarding the third world’s problems, he promoted the superiority of the advanced civilizations over the less advanced ones. Although Marxism is not fully at the root of the sordid “efficiency” of communism of the 20^th century – since many other “extraordinary” circumstances need to be taken into account in the explanation –, the fact that so many individuals, from the 19^th century (Proudhon, Bakunin, Tucker), managed to anticipate what would happen if his theories would be applied (namely, “state slavery”) remains proof that Marxism has unintended foreseeing capabilities: it predicted (and prepared) the birth of totalitarian philosophy.

The revival of Marxism depends on what it is understood by the notion of “socialism”, concludes Kołakowski. On the one hand, in the simplest, most popular sense, it is referred to as an “alternative society” to capitalism, a system in which greed, the driving force of the capitalist system, is removed, and all people are equal in a forced brotherhood – viz., totalitarianism (that, by default, means in fact extreme inequality, with the power in the hands of the central committee). On the other hand, leaving aside the Marxist vision, some of the meanings of socialism encompassed liberal values, now mandatory in market-based economies – viz., universal education, medical care, progressive taxation, religious tolerance, abolishment of national and racial discrimination, equality of women, freedom of press and of association, regulation of working conditions and a system of social security. Though, did this really occur due to or in spite of Marxism? 

János Kornai: the “anti-equilibrium” economist 

“If forced to name those who have social research influenced me most, I mention the names of Schumpeter, Keynes, and Hayek, but first on the list comes the name of Karl Marx.” – J. Kornai, “Marx through the Eyes of an East European Intellectual”. 

János Kornai is what we may call a “disequilibrium economist” (1971) in the middle of an era when the “general equilibrium” had been the fictional, if not fantasist, mainframe in which all economic phenomena were scrutinized and to which all economic concepts were traced back. The portfolio of concepts was completed by the “shortage economy” (1980), the basic hypostasis of a socialist system, and by its capitalist counterpart, the “surplus economy”; both are disequilibrium concepts derived from the system-specific attributes of these two fundamental institutional societal arrangements. Following a comprehensive and somehow “final” treatment of socialism in his 1992 work, The Socialist System: The Political Economy of Communism, Kornai stopped short of achieving a symmetrical treatise on capitalism, although an implicit analysis was present in all the comparative and transitional surveys dedicated to economic systems after 1990.

Even if a full-fledged analysis of capitalism is absent from his remarkable opus, significant pieces from a capitalist economic puzzle are to be found in his 2013 book, Dynamism, Rivalry, and the Surplus Economy. Two Essays on the Nature of Capitalism, which benefited from an enriched translation in Romanian by incorporating two more essays (“Liberté, Égalité, Fraternité: Reflections on the Changes following the Collapse of Communism” and “Marx through the Eyes of an East European Intellectual”). The book is the testimony of an economist who considers himself both Easterner and Westerner, and who, more than just witnessing from a safe distance, criticized loud and clear and in equal measure the socialist and capitalist systems from the inside. In the last years, his concerns covered his home country’s tumult, smouldering between an authoritarian government and a (faint) freedom fighting civil society: Diagnosis: Studies on the Hungarian situation (in Hungarian, 2017).

Fascinating and luminating with regard to his epistemic/economic/ethical positions throughout his life are his memoirs. Published with the title By Force of Thought. Irregular Memoirs of an Intellectual Journey (2007), this is the odyssey of a political economist that wholeheartedly embraced communism in his youth (out of repulsion for the Nazi experiences that marked his family) and intellectually abandoned it piece by piece during the rest of his life (starting also from personal experience with the absurd injustice of the communist regime). This emotional U-turn only completed the revelation that the problems of socialism were not accidental, but systemic, caused by irremediable inner traits that cannot be addressed by hybridizing it with market mechanisms (as he initially thought), but by remorselessly abandoning it, along with all of its outrageous ethical failures. Kornai is a systematic microeconomist of the macroeconomic systems. And a professing democrat. 

Anti-autocracy

In his study “The System Paradigm Revisited” (2016) – a “sixteen years after” follow-up to “The System Paradigm” (2000) –, Kornai deals, among other things, with the issue of the consanguinity between the (economic) systems and the (political) regimes.

He observes that even if countries differ in their essential features, by identifying the specific characteristics of their system (what makes them different from the others) and, at the same time, what is common among the different constructs within countries, every country can be included either in the capitalist system or in the socialist one. However, when comparing these two systems, Kornai rhetorically asks if the comparison is valid / sound / useful, since there is a significant discrepancy between the length of time over which capitalism manifested itself (centuries) and that in which socialism existed (a “laboratory” experiment, with a duration of several decades in the 20^th century). He himself gives the answer, stating that, by the method of comparison, a better grasp of the capitalist system is provided, for in this manner what is specific and what is common can be identified unambiguously.

In further analysing the varieties of the two big systems, Kornai uses as the main criterion of organisation / separation / identification the political-governmental form, thus firmly distinguishing between three types: democracy, autocracy and dictatorship (each of these categories is considered a type in itself, neither one being, in his view, a mixture of the other two).

Top-down control, high level of centralization, rewards / promises and sanctions / threats as means to enforce the leader’s decisions are all common features of autocracy and dictatorship. Still, autocracy does not use fierce terror or other brutal repression instruments (people are not afraid of their own shadow). The existence of democracy is not a guarantee that a society could not “evolve” into autocracy or dictatorship (e.g., Russian democracy turned into Putin’s autocracy, functioning under a capitalist system). Dictatorship is the form of government in China, but nevertheless the country has a capitalist system. Both Hitler’s Germany and Stalin’s Russia were dictatorships in the cruellest degree (interfering in almost, if not all of the daily aspects of human life), but what strikes most is that dictatorship arrived in both systems: capitalism, in Germany, and socialism, in Russia.

Definitely, what bothers more than anything else is Hungary’s current situation with the rise of the “Orbán system”. He uses here the term system in a “minor” sense than in the previously mentioned one. But it is nevertheless a system, as “characteristics of Orbán’s Hungary amount to a system because they affect and reinforce each other. Each serves a common purpose: to boost, solidify and render irremovable the power of its leadership and its head, Viktor Orbán”. Kornai experiences also a disappointment in the complicity of that part of the elite that defends “the status quo vigorously out of self-interest, not just because they are loyal to their leader but to retain their power and wealth” and in that “the millions of ordinary citizens accept the current situation unresistingly and silently”. With the memory of a former young active supporter of past, “red” iron-hand politics, surrounded by anaesthetised millions, he sees that nothing good can come of this. 

Václav Klaus: the “heretic” European liberator 

“We must say openly that the present economic system of the EU is a system of a suppressed market, a system of a permanently strengthening centrally controlled economy.” – V. Klaus (speech in the European Parliament, Brussels, February 19, 2009). 

Called “the Professor” by his friends, Václav Klaus, former President of the Czech Republic, is one of the few politicians in Europe and worldwide who learned “free market economics” and taught others from its source (he was well-educated in Mises, Hayek, Friedman). This happened before he was compelled to forsake more than “three times” the liberal idea and “socialise” in order to gain political authority. “This story should also give you pause before you get too excited the next time you hear someone talking like Mises introduced himself as a politician” (Šíma and Šťastný 2000). Within the European political circles, Klaus is seen as a bugbear. He is the “lunatic” who is sceptic as regards the “orthodoxy” of the idea that the prosperity of half a billion EU citizens will depend on the continuous European political centralisation. And sceptic that the global warming has to be settled by giving more powers to the State-as-cooler. And sceptic that the boom-bust cycles are the product of market deregulation and not – God forbid! – of the system flaw within the modern monetary and banking setup, remediable by do-nothing-policies. When he came to give a speech in front of the European Parliament, in Brussels (on February 19, 2009), on the risks of the European Union indulging in the route of political-economic over-centralisation, he was violently booed by the EU’s “representative democracy”.

The reforms inspired by the liberal readings of Klaus helped him assist the transition to the market economy in Czech Republic in the 1990s as member of the Government: the elimination of the administration of prices and currency exchange rates, privatisation, property restitution (although applied with some exceptions). But, as everywhere in case of transitions, the poisoned pawn was transformed into a poisonous queen: “ the government’s special part”. Pursuant to this dangerous concession, Klaus-the-pragmatist often sabotaged Klaus-the-orator: i) rent control policies; ii) the universal principle of property restitution was amended by the citizenship principle; iii) delay in reconstructing the army based on voluntary enrolment; iv) delay in eliminating the monopoly in telecommunications; v) inconsistent discourse on EU and NATO, both problematic and inefficient superstructures (as he so many times admitted), and at the same time indispensable to the nation’s future; vi) the absurd interdiction for the Czech population to hold bank accounts abroad, such measure having as purpose the protection of the weak national banking system at that time (but not even he obeyed such a regulation!). And several other minor sins of statist-interventionist nature that may be recalled and restated as being largely the antithetical of the (almost) libertarian principles exposed by his rhetorical interventions (Šíma and Šťastný 2000). 

The “EU is not Europe”

Klaus’ Euroscepticism remained rampant all the more after his departure from the position of President of an EU Member State. His pronouncements during a recent speech given at the CFS Presidential Lectures, at the Center for Financial Studies (Goethe University, Frankfurt, March 12, 2019) are illustrative of his perception of the contemporary Brussels-centred EU. They are coming from a compatriot of Kafka’s who interacted frequently with the EU’s “Castle” (aka the European Commission headquarters?) and views the “Process” of political unification (aka a verdict given short of a fair popular trial?) as some variety of a “Metamorphosis” that is too much for him. Is the bellow particular passage politically-incorrect or impolitely-judicious?

“We live in the era of a new authoritarianism of illiberal elites, of neo-Marxists of the Frankfurter Schule, of so called «experts», of bureaucrats of international organizations, of IT protagonists and lobbyists, of loud and noisy exponents of political NGOs. As a result of it, we are the witnesses of an important institutional change, of a shift in power from elected representatives to permanent functionaries, from local councils to central bureaucracies, from legislators to executives, from national parliaments to Brussels and Strasbourg, from the citizen to the state. The form and substance of political discourse have changed substantially as a result.” 

Concluding thoughts on why to expose absurdum 

Coming full circle with the beginning of this discussion, a fact is that both socialism and its “heritage” remain a generous laboratory for mental experiments where common sense ethics and economics can inform us of some elementary truths and expose absurd “values” and undertakings thereof. The usurpations of personal freedom – either of epic scale, as those in the before-1989 East, or marginal, as those in contemporary times – can in no-way be argued honestly, even if they can be enforced aggressively. If so pursued, they become degenerative. Therefore, intellectual vigilance and argumentative “pre-emptive strikes” are not only highly advisable, but, in a sense, mandatory. This attitude is praiseworthy despite the fact that those who embrace it and warn against latent authoritarianism, even in the middle of apparent democracy, risk to become “politically unpopular” (for being overtly anti-populist) or stamped as “un-progressive” (for preaching resolute freedoms). 

Selected readings 

Apăvăloaei, M.A. 2018. Analiza praxeologică a acțiunii politice și a cooperării internaționale. O abordare interdisciplinară la confluența dintre știința economică și știința politică. București: Editura ASE.

Kafka, F. 2014. The Essential Kafka: The Castle; The Trial; Metamorphosis and Other Stories. Ware: Wordsworth Editions.

Klaus, V. 2008. Blue Planet in Green Shackles: What Is Endangered: Climate or Freedom? Washington, DC: Competitive Enterprise Institute.

Klaus, V. 2012. Europe: The Shattering of Illusions. London: Bloomsbury Publishing.

Kołakowski, L. 2005. Main Currents of Marxism: The Founders - The Golden Age - The Breakdown. New York and London: W.W. Norton & Company.

Kołakowski, L. 2013. Is God Happy? Selected Essays. Philadelphia, PA: Basic Books.

Kornai, J. 1971. Anti-Equilibrium. Amsterdam: North-Holland Publishing Co.

Kornai, J. 1980. Economics of Shortage. Amsterdam: North-Holland Publishing Co.

Kornai, J. 1992. The Socialist System: The Political Economy of Communism. Princeton, NJ: Princeton University Press.

Kornai, J. 2000. The System Paradigm. In: Schekle, W., Krauth, W., Kohli, M., Elwert, G. (eds): Paradigms of Social Change. Frankfurt and New York: Campus Verlag, St. Martin’s, pp. 111-133.

Kornai, J. 2006. By Force of Thought: Irregular Memoirs of an Intellectual Journey. Cambridge, MA: Massachusetts Institute of Technology.

Kornai, J. 2014. Dynamism, Rivalry, and the Surplus Economy: Two Essays on the Nature of Capitalism (1st Edition). New York, NY: Oxford University Press.

Kornai, J. 2016. The System Paradigm Revisited. Clarification and Additions in the Light of Experiences in the Post-Socialist Region. Acta Oeconomica 66 (4), pp. 547-596.

Mises, L. von. [1940] 1981. Epistemological Problems of Economics. New York, NY: New York University Press.

Rothbard, M.N. [1962, 1977] 2004. Man, Economy and State (with Power and Market). Auburn, AL: Ludwig von Mises Institute.

Šíma, J. and Šťastný, D. 2000. A Laissez-Faire Fable of the Czech Republic. Journal of Libertarian Studies 2:155-178.

Tismăneanu, V. 2014. Cuvânt-înainte. Foreword to Kołakowski, L. 2014. Este Dumnezeu Fericit? București: Editura Curtea Veche.

Vásquez, I. and Porčnik, T. The Human Freedom Index 2018. Washington, DC: The Cato Institute; Vancouver: The Fraser Institute; Berlin: The Friedrich Naumann Foundation for Freedom.