Dynamism, Rivalry, and the Surplus Economy : Two Essays on the Nature of Capitalism

In __Dynamism, Rivalry, and the Surplus Economy__, János Kornai examines capitalism as an economic system and in comparison to socialism. Kornai explains his view of capitalism as an economy of surplus--a chronic excess of supply of goods and labor. This environment breeds rivalry among producers, which in turn encourages innovation. Socialism, on the other hand, is defined by a shortage of goods and labor and excess of demand. Whereas socialism is slothful and imitative, capitalism is dynamic and progressive. The two essays of this book will explore these differing ideologies on macro and micro levels, ending with definitive explanations of how the systems work and how they develop. 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New innovator entrepreneurs 40 3.2. The acceleration of follow-up and diffusion 42 3.3. Creative destruction 46 4. Reflection of Historical Reality in People’s Minds 51 4.1. The basic phenomenon: lack of understanding 51 4.2. The responsibility of the economic profession 54 4.3. The responsibility of politicians 56 4.4. Interconnectivity and democracy 57 5. Concluding Remarks 62 SECOND ESSAY: Shortage Economy—Surplus Economy 64 1. Introduction 66 1.1. Impressions 66 1.2. A first approach to clarification of concepts 68 1.3. The place that the approach taken in the essay occupies in economic discourse 69 1.4. An advance look at the boundaries and structure of the subject-matter 70 2. The Market for Goods and Services: The Mechanism for the Reproduction of Surplus 72 2.1. An example from economic history: the U.S. telephone system 72 2.2. Supply-related processes 75 2.3. Demand-related processes 82 2.4. The pricing process 83 3. The Market for Goods and Services: The Conceptual Apparatus and Measurement Methods 85 3.1. “Pure,” easily handled cases 85 3.2. The first difficulty: continual mutual adjustment of supply and demand 91 3.3. The second difficulty: parallel occurrences of excess supply and excess demand 93 3.4. Diversion: observing the obstacles to and micro constraints of production 93 3.5. The third difficulty: distinguishing “necessary” from “superfl uous” stocks 96 3.6. The fourth difficulty: unjustified aggregation 99 3.7. Pragmatic suggestions for measurement and a conceptual apparatus 100 3.8. Formation of synthetic indicators or “composite indices” 101 4. The Labor Market: The Mechanism for the Reproduction of Surplus 103 4.1. Conceptual clarification and measurement 103 4.2. The shock to the labor market caused by the change of system 107 4.3. “Keynesian” unemployment 110 4.4. Structural unemployment 113 4.5. Mismatched adjustment, frictional unemployment, and demand 115 4.6. The efficiency wage 118 5. A Summary of the Positive Description and Causal Analysis 121 5.1. The workability of the concept of “equilibrium” 121 5.2. Asymmetry 126 5.3. A summary account of the two demand–supply regimes 128 5.4. The generation of a surplus economy by the capitalist system: the causal chain 133 5.5. Genetic propensities 137 6. The Effect and Assessment of the Surplus Economy 140 6.1. A view of the effects and the value judgments 140 6.2. Innovation 141 6.3. The sovereignty and manipulation of the consumer 142 6.4. Productivity and coordination 143 6.5. Adaptation 144 6.6. Distribution of income and wealth 144 6.7. “Materialistic” and “spiritual” values 145 6.8. The direction of corruption 146 6.9. The advantages and drawbacks of capitalist competition, through the example of the automotive industry 147 6.10. A stand in favor of capitalism and the surplus economy 150 6.11. The scope for a theoretical synthesis and its constraints 152 6.12. The demand for mathematical models with explanatory power 156 7. Departures from the General Scheme 159 7.1. Fluctuations of the business cycle 159 7.2. The war economy 164 7.3. Historic changes and lasting tendencies in modern capitalism 165 7.4. Market-oriented reforms under socialism and the postsocialist transition 173 8. A Personal Postscript 176 Appendix 178 References 184 Index 196 A 196 B 196 C 197 D 198 E 198 F 199 G 199 H 200 I 200 J 200 K 200 L 201 M 201 N 202 O 202 P 202 Q 203 R 203 S 203 T 205 U 205 V 205 W 205 X 206 Kornai Examines Capitalism As An Economic System And In Comparison To Socialism. He Offers A View Of Capitalism As An Economy Of Surplus - A Chronic Excess Of Supply Of Goods And Labour. This Environment Breeds Rivalry Among Producers, Which In Turn Encourages Innovation. Socialism, On The Other Hand, Is Defined By A Shortage Of Goods And Labour And Excess Of Demand. Whereas Socialism Is Slothful And Imitative, Capitalism Is Dynamic And Progressive. The Two Chapters Of This Book Explore These Differing Ideologies. First Essay: Innovation -- Introduction -- Capitalism, Socialism, And Technical Progress -- Transformation And The Acceleration Of Technical Progress -- Reflection Of Historical Reality In People's Minds -- Concluding Remarks -- Second Essay: Shortage Economy-surplus Economy -- Introduction -- The Market For Goods And Services: The Mechanism For The Reproduction Of Surplus -- The Market For Goods And Services: The Conceptual Apparatus And Measurement Methods -- The Labor Market: The Mechanism For The Reproduction Of Surplus -- A Summary Of The Positive Description And Causal Analysis -- The Effect And Assessment Of The Surplus Economy -- Departures From The General Scheme János Kornai. Includes Bibliographical References And Index. "In Dynamism, Rivalry, and the Surplus Economy, János Kornai examines capitalism as an economic system and in comparison to socialism. Kornai explains his view of capitalism as an economy of surplus--a chronic excess of supply of goods and labor. This environment breeds rivalry among producers, which in turn encourages innovation. Socialism, on the other hand, is defined by a shortage of goods and labor and excess of demand. Whereas socialism is slothful and imitative, capitalism is dynamic and progressive. The two essays of this book will explore these differing ideologies on macro and micro levels, ending with definitive explanations of how the systems work and how they develop."--Publisher's website In this book, János Kornai examines capitalism as an economic system and in comparison to socialism. The two essays of this book will explore these differing ideologies on macro and micro levels, ending with definitive explanations of how the systems work and how they develop. In this book, Janos Kornai examines capitalism as an economic system and in comparison to socialism. The two essays of this book will explore these differing ideologies on macro and micro levels, ending with definitive explanations of how the systems work and how they develop.