The paper sets out to show that János Kornai's book Economics of Shortage, published in 1980, had played a very important role in the intellectual preparations for transition - most certainly in Hungary but also in other former socialist countries. It analyses the environment in which the book was born and formulates eight theses on its effects, emphasising its professional soundness, carefully pointed focuses, clarity of methodology and radicalising influence. The paper concludes that later on the book also helped the analysis of the transition process itself.
Anti-Equilibrium (1971) was well ahead of its time in emphasising that (i) economics should draw from biology, rather than physics, as its methodological underpinning; (ii) evolutionary logic requires a different type of decision-making in simple, routine matters, as opposed to large and important decisions; (iii) the most important production processes are non-linear, with increasing returns to scale being the rule, rather than the exception in modern capitalist economies and — in conclusion — that there is no such thing as general equilibrium. In modern societies, goods and services are either in shortage (Socialism) or in a state of oversupply (Capitalism). It is either a buyers’ market or sellers’ market.
the historical and political differences between the Soviet Union and Hungary.’ 46 Constitution of Hungarian People’s Republic in 1949 employed numerous regulations from the 1936 Soviet Constitution. It ensured the socialistsystem applied in the whole