János Kornai and his memorable work

János Kornai was the most outstanding economist of socialist and postsocialist countries in the last fifty years. He was a world-renowned scholar who left behind an immense legacy of works published in over twenty languages. His theory of systemic disequilibrium in a centrally planned economy, concept of hard and soft budget constraints and the economics of shortage were of revolutionary importance to the scientific interpretation of the processes of production, distribution and capital accumulation in state socialist economies. Also of note is the author’s work on political economy of socialism, which he taught at the Harvard University. When analysing the socialist system Kornai essentially contented himself with a descriptive approach, whereas in works published post-1989 he focused his attention on normative economics suggesting directions of structural reform, institution-building and economic policy in post-socialist transition. Of great importance is also Kornai’s last book comparing the disequilibrium characterised by shortage in socialism with the disequilibrium typical of the surplus in capitalism. The article analyses the evolution of this outstanding economist’s theoretical thought and its impact on real economic processes. Polemic comments are also made on the interpretation of economic and social processes taking place in China.