Kornai János: Anti-Equilibrium. On economic systems theory and the tasks of research - Reprints of Economic Classics (Fairfield, 1991) / angol nyelven
Part I: Starting points
28 THE BASIC CONCEPTS OF GE THEORY ture most of the work which is attributed to the “neo-classical school,” or called “neo-classical price theory” in Western countries. It is not my intention to criticize or refute one by one, in the order described in Sections 3.2 to 3.4, the basic assumptions, the main concepts, or the major questions posed. To accomplish this, I would be obliged to follow the scheme of thought of the GE school when my aim is its criticism. Instead, I shall proceed with my own analysis, submitting to criticism in the process one or another basic assumption, concept or method of the GE school. To help orient the reader, Table 3.1 presents a survey of the various places in the book where the assumptions, concepts and statements of the GE school will be subjected to criticism. Here, I will give only a preliminary outline of the leitmotivs of my criticism in order to facilitate the development of my ideas. 1. As has been pointed out above, in connection with its historical importance, the GE school has suggested two important and correct ideas: First, scarce resources should be used economically, and second, production should be adapted to needs in order to give the greatest possible satisfaction to the consumer. However, these conclusions stem from an analysis based on an unrealistic vision of the world. In reality, there are mammoth corporations and the role of the government is great. GE theory assumes atomized markets and “perfect” competition. In reality, there exist sharp conflicts of interest. GE theory sees peaceful harmony in the market. In reality there is concentration and rapid technical progress. GE theory “disregards” increasing returns to scale, one of the most significant aspects of technical progress and one of the fundamental explanations of concentration. In reality, the information structure is highly intricate and complex. GE theory describes a system governed in an entirely reliable manner by a single signal, namely prices. Thus, the GE school is disorienting, and diverts our attention from the most important task of economic science, namely, the realistic description, explanation, and formal modelling of the actual operation of the socialist and capitalist economic systems of the present era. 2. The use of the attribute “general” in connection with Walrasian models is warranted in so far as they always describe a whole system (e.g. the economy of a whole country) and not only some part of it. Thus, the “general” equilibrium models may be contrasted with the “partial” equilibrium models of the GE school, which describe only a single firm or household, or the market for a single product. It would be entirely unwarranted, however, to interpret the attribute “general” (and this is exactly what many economists would do) as implying a realscience theory of general validity, valid, to a certain extent, for every age, country and system.