You are on page 1of 176
Markets in the Name of Socialism The Left-Wing Origins of Neoliberalism Johanna Bockman Stanford University Press Stanford, California tT? Linrarvorme = © BY Centaat Eurovean Universiry “ar Bupari Stanford University Press Stanford, California © zor by the Board of Trustees of the Leland Stanford Junior University Al rights reserved, [No part ofthis book may be reproduced or ransmited in any form or by any cans, electronic ot mechanical, including photocopying and recording, or in any information storage of rtrieval system without the prior writen permission of Stanford University Press Printed in the United Scates of America onacid-fce,archivalquality paper Library of Congsess Cataloging-in-Publicaon Dara Bockman, Johanna, author. ‘Markets in the name of socialism : the left-wing origins of neoiberalism / Johanna Bockman. pages em Includes bibliogrephical references and index. ISBN 978-0-8047-7566-3 (loth : all. pape:) 1. Neoliberaism —History. 2, Neoclaical school of economics—History. 3.Marsian economics—History. 4, Socialism—History. 1. Tite. HB95.863 2011 srosi—dex2 2010045298 “Typeset by Thompson Type in 11/335 Adobe Garamond Contents Preface List of tnterviewoes. Acknowledgments Introduction: Economists and Socialism Neoclassical Economics and Socialism: From the Beginnings to 1953, A New Transnational Discussion among Economists in the 1950s Neoclassical Economics and Yugoslav Socialism Goulash Communism and Neoclassical Economics in Hungary ‘The International Left, the International Right, and the Study of Socialism in Italy Market Socialism or Capitalism? The Transnational Critique of Neoclassical Economics and thé Transitions of 1989 7 50 76 105 133 157 Vi Contents 7 Past-1989: How Transnational Socialism Became Neoliberalism without Ceasing co Exist Conclusions Nores. Bibliography Index 25 225 269 309 Preface IN FALL 1988, 1 ARRIVED IN BUDAPEST, Hungary as an exchange student through the University of California's Education Abroad Pro- gram. | fell into a situation that I did noc understand but that would send. my life in 2 new direction. Through the year, a the Karl Marx University of Economics, we exchange students studied with Hungarian scholars, who provided us new ways to understand the world, even in such courses as American literature. We took part in large protest, visits to Roma vil- lages, evenings in underground punk clubs, panicked discussions with our Education Abroad Program directors, and the general social life of young college students, who happened to arrive in a place of historic change. “The language of our professors, who talked positively about mar- kets, democracy, and freedom, surprised me. The American right wing, had done so much to politicize these words and done such evil in Central America and elsewhere in their name. Our professors in the Karl Marx University of Economics sounded like Reagan robors. After recucning to the United States and entering graduate school, I found myself drawn to tuying to understand what I had experienced. What was socialism? What ‘was capitalism? What had happened in 1989? This book is my current answer to these questions. During my dissertation research, I discovered that Hungarians had becn calling for both markers and socialism since the 19505. For those familiar with Hungary, such a discovery was noc a surprise. Yer, in the 1990s, scholars already assumed that socialism had been, and would likely always be, the centrally planned, state socialism exemplified by the Soviet Union. [n this environment, a reminder of Hungary's market socielist pase