Kornai and Hayek

[Brad De Long]

>Wasn't the Soviet Union's economic
>growth faster than that of the unplanned
>economies of capitalism in their
>beginnings ?  What about the successes
>of China in feeding and clothing so many people
>with a planned economy ? There was
>a clear economic improvement over
>its previously unplanned economy.
>
>Is Brad saying that unplanned economies
>"work well " ?  Aren't there a huge number
>of counterexamples to this propostion ?
>What does he mean by work well ?
>Work well for whom ? Is he saying
>the invisible hand actually does exist ?
>

In the 1940s Paul Sweezy (and many others) expected the end of World War II
to be followed by rapid economic growth by whatever countries wound up in
the socialist camp and renewed depression elsewhere--and that within a
generation it would be very clear that living standards were higher, the
social provision of necessities more complete, and technology and industry
more advanced in socialist than in non-socialist economies. Nikita
Khrushchev still believed this in the second half of the 1950s--that "we
[the socialists] will be present at your [the capitalists] funeral" because
one system (the socialist) was rational and capable of supporting human
progress and the other (the non-socialist) wasn't.

Looking at western Europe and eastern Europe--or at South Korea and North
Korea, or at Vietnam and Cambodia on the one hand and Singapore, Malaysia,
Thailand, and the Philippines on the other--the confident forecasts of
Sweezy and Khrushchev just didn't come true.

Kornai's trying to figure out why not. That seems to me to be a laudable
project...

Brad DeLong