Kornai on the affinity of systems: Is China today an illiberal capitalist system or a communist dictatorship?

Public Choice. 2021;187(1-2):197-216. doi: 10.1007/s11127-020-00835-0. Epub 2020 Jul 27.

Abstract

More than 40 years ago, János Kornai introduced his famous supermarket metaphor. Socioeconomic systems cannot be constructed from purposely selected features, similar to customers in a supermarket, who can freely put into their shopping trolley whatever they like. Systems constitute an organic whole. They contain good and bad features in fixed proportions. After 1990, Kornai and most Western commentators expected that as market integration and private property expand, China would eventually turn into a liberal democracy. Prior to the worldwide fall of communism, Kornai had three primary criteria to determine whether a country was socialist or capitalist; later he amended this with six secondary ones. The present paper introduces into this list an additional 11 criteria-i.e. 20 quantifiable metrics altogether. Kornai was among the very first to recognize that with President Xi Jinping taking charge, China made a U-turn. While capitalist elements remain strong, in the final analysis, the country is on its way back to where it was before 1978.

Keywords: China; Comparative economics; Dictatorship; Illiberalism; Liberalism.