Janos Kornai understood capitalism by studying its opposite

IN HIS CABIN aboard the , a luxury river boat sailing to Wuhan, Janos Kornai was sleepless with excitement. The Hungarian economist, who died last month, was one of seven foreign experts invited in 1985 to share their views on China’s economic reforms. As Julian Gewirtz recounts in his book “Unlikely Partners”, Mr Kornai stole the show. On a week-long cruise with an audience of Chinese technocrats, he dissected socialism’s familiar “cares and woes” (featherbedded firms, rushed growth and consumer shortages). And he offered a hopeful vision of a restrained, guided capitalism. His book “Economics of Shortage” soon became a bestseller in China, although he never saw any royalties.Forty years earlier, Mr Kornai lay on the roof of a Jesuit monastery in Budapest, hiding from a fascist raid down below, even as Soviet forces dropped bombs from above. The skyline had a “hellish beauty”, he wrote. As a Jewish Hungarian who had lost his father and a brother to the Holocaust, he welcomed the Soviets as liberators. He did not even mind when they stole his watch. His gratitude was one reason why he became an enthusiastic communist, so devoted to his work on a party newspaper that he missed the birth of his first child. His communism, in turn, explains why he became an economist. He pored over Karl Marx’s “Das Kapital”. Enlightenment radiated from it “like sunshine”, he later wrote. “I had no more doubts about what profession to choose.”