[1] This talk is about complexity, irony, and praise. During the past two decades, I have published a few papers on unexploited opportunities, I mean, on chances to westernize that economists have missed in Eastern Europe. 1 (Note1: See J.M. Kovács "Reform Economics: The Classification Gap", in: Daedalus, Winter 1990; "From Reformation to Transformation: Limits to Liberalism in Hungarian Economic Thought", in: Eastern European Politics and Societies, Winter 1991; "Compassionate Doubts about Reform Economics (Science, Ideology, Politics)", in: J.M. Kovács & M. Tardos (eds.): Reform and Transformation. Eastern European Economics on the Threshold of Change, London, Routledge, 1992; "Which Institutionalism? Searching for Paradigms of Transformation in Eastern European Economic Thought", in: Hans-Jürgen Wagener (ed.): The Political Economy of Transformation, Physica-Verlag, Heidelberg, 1993; "Planning the Transformation? Notes about the Legacy of the Reform Economists", in: J.M. Kovács (ed.): Transition to Capitalism? The communist legacy in Eastern Europe, Transaction Publishers, New Brunswick and London, 1994; "Örökség, utánzás, felfedezés. Közgazdasági gondolkodás Magyarországon 1989 után" (Legacy, Imitation, Invention. Economic Thought in Hungary after 1989), in: Közgazdasági Szemle, April 1996; "A tékozló fiú sorsa. A kelet-európai közgazdasági gondolkodás (és története) hasznáról" (The Story of the Prodigal Son. Notes about the Value of Economic Thought and Its History in Eastern Europe), in: Közgazdasági Szemle, April 1997; "Sound Interventionism? Challenges of the Transformation in Eastern European Economics", in: Martin Bull & Mike Ingham (eds.): Reform of the Socialist System in Central and Eastern Europe. Progress and Prognosis, Macmillan 1998; "Praising the Hybrids. Notes on Economic Thought Ten Years After", in: East European Politics and Societies 1999/2. ) Looking back on these twenty years, I see myself talk, in a masochistic obsession, first about the parochialism of market socialism (this was my Leitmotivduring the 1980s) then - in the 1990s - about "constructivist" legacies of reformism, to use Hayek’s phrase, in developing the economics of the transformation. A couple of years ago, I even reached back to the Holy Bible for an analogy. By invoking the story of the prodigal son, I tried to show the dire conditions of Eastern European scholarship when returning, after a more than seven-decade journey, to the family home of Western economics.
[2] I do not have to tell you how unpopular this kind of reasoning is even if the historian a.) attributes the unexploited opportunities to these dire conditions rather than to the scholars themselves; and b.) regards himself as a member of the same research community, that is, as one of those who, in their own research programs, have missed quite a few chances to borrow ideas from the West.
[3] In the new millennium, let me stop lamenting and deal, for a change, first with complaints that have been made by some of our distinguished colleagues about some other distinguished colleagues of ours. As our discussions in the project workshops demonstrated, the intellectual historian is confronted with a ready-made dichotomy in the everyday discourse of the profession, no matter whether in Warsaw or Prague, in Bucharest or Tallin. It is based on two essentially generation-dependent lamentations. I swear, I do not sharpen the tongue of the self-appointed classifiers.
[4] According to numerous members of the older generations, economic science in the region has been inundated by the Western mainstream. This is actually a process of spiritual colonization. Among the colonizers we find young aborigines who, upon their return from PhD courses in the West, begin to introduce standard neoclassical thought in higher education with all the enthusiasm of neophytes - unfortunately, on the level of third-rate universities in the US. They are increasingly profiting from international research projects and, while believing that they have reached the peaks of universal economic science, they are mere data providers for and plagiarists of their idols. These newcomers’ main preoccupation is in building sterile mathematical Models (with a capital "M") of a few variables. Pure methodology based on shaky assumptions of rational choice is preferred to the real world. Scientific imagination stops at the border of the models, generalization is constrained, and normative conclusions are pale. If they nevertheless leave pure economics behind for a moment and venture to advocate government policies, they tend to apply dogmatic neoliberal solutions in a rather aggressive manner. All in all, snobbery, elitist myopia, and professional chauvinism prevail in the new vanguard.
[5] In contrast to this critique, those whom their older colleagues call "young Turks" are convinced that it is still the ex-reformers of the old regime who dominate economic culture in Eastern Europe. These reformers are engineering the transformation in close collaboration with the political elite. Under the pretext of a new political economy, they tend to subordinate economics to politics. You find them in the advisory bodies of the parties and the governments and on editorial boards, that is, in every committee that distributes public money and official titles. They have replaced reform with transformation under the aegis of a rather statist version of Soziale Marktwirtschaft. This is the bottom line of their capacity of innovation. These "transformers" continue to adore Grand Designs and vast social experiments without proper empirical knowledge, although they love to talk about Reality (with a capital "R"). As former Marxists, they idealize verbal and historical arguments, fuzzy concepts and ambiguous metaphors, so the institutional reform programs they propound are inaccurate and parochial. Keynesian leanings, state intervention, and again state intervention...
[6] These complementary lamentations passionately reinforce each other. Yet, I suspect that any economist in this room would feel embarrassed if the "young-versus-old" dichotomy were applied to describe his or her scientific record. Anyway, who has not yet seen dozens of old model-builders and, conversely, young social engineers around? Is model building and neoliberalism logically connected? If you lean toward Keynes, do you forget mathematical analysis? If someone opts for Walter Eucken, should he or she be considered less Westernized than a follower of Milton Friedman? Obviously, the actual frontlines intersect each other and confuse the simple dual scheme. Did I say "frontlines"? The easiest (and cheapest) task for a historian would be, of course, to discover, in a Foucaultian way, a desperate power struggle within the research community behind the veil of the discourse on generations. I leave this task to the warriors themselves. I would like to call your attention instead to another basic component of classification, which is camouflaged by complaining about the generational cleavage.
[7] I will focus on the concept of the East-West divide, an important facet of our workshops, which features in the project proposal as "New East-West Asymmetries". Westernization (again I quote the common parlance of quite a few economists in the region) means "civilization". The Westernizers are more professional and educated, are much closer to the state of the art in research, use more sophisticated and reliable research techniques, and - last but not least - draw clear boundaries between academia and policy advocacy. Hence, the West is tantamount to higher scientific quality. This is an old argument; its composition has not changed much since the first zapadniki began to adore the Occident in the middle of the 19th century.
[8] It would be tempting to borrow spiritual ammunition from Edward Said, Larry Wolff, or Maria Todorova to fight the "Orientalist" message of this argument by pointing to the fact that the West invents its own East as a low-quality constituting Other in economics, too. Indeed, the single Nobel Prize won by Leonid Kantorovich many, many years ago (and shared by Tjalling Koopmans), the rare occasions in which the oeuvre of an Eastern European economist is acknowledged by an entry in an encyclopedia or a renowned textbook published outside the former Eastern Bloc, or - to summarize the national reports in this project - the formidable fact that, during the past decade, Eastern European authors have hardly increased the frequency of their publications in leading journals of the profession - all these sad things can partly be explained by Western disinterest and condescension. But only partly, I believe. The other part, however, belongs to our sphere of responsibility. Right or wrong, we are still rather different. I said "different" not "inferior". This proud proposition requires from me a large portion of self-discipline, but will perhaps make the analysis less biased. In the following, I will do my best to apply the term "Westernization" in its possibly most value-free version, as a synonym for cultural exchange, encounter, or diffusion. 2 (Note2: In the following, due to the lack of time, I will not make a distinction between the various mechanisms of disseminating economic ideas (the market transaction, the contamination, the communication, the cultural/epistemic community, etc. approaches). Cf. Peter A. Hall The Political Power of Economic Ideas: Keynesianism across Nations, Princeton UP, 1989; Vincent Ostrom The Meaning of Democracy and the Vulnerability of Democracies, Michigan UP 1997; David C. Colander, Alfred W. Coats (eds.): The Spread of Economic Ideas, Cambridge UP, 1993; A. W. Coats (ed.): The Post-1945 Internationalization of Economics, Duke University Press, 1997. For comparative purposes, see in particular the following papers in the latter volume: S. Ambirajan The Professionalization of Economics in India; Back Choi, Young The Americanization of Economics in Korea; Ikeo, Aiko The Internationalization of Economics in Japan; P.L. Porta Italian Economics through the Postwar Years; M.R. Loureiro The Professional and Political Impacts of the Internationalization of Economics in Brazil; J.J. Polak The Contribution of the International Monetary Fund; B.A.Vries The World Bank as an International Player in Economic Analysis; I. Maes The Development of Economic Thought at the European Community Institutions; V. Montecinos Economists in Political and Policy Elites in Latin America; A.C. Harberger Good Economics Comes to Latin America, 1955-95.)
[9] Do you remember what we expected, back in 1989, to happen in terms of Westernization in our countries? Let me reconstruct the main strand of public opinion in the research community of the time about taking over economic ideas (discourses, paradigms, schools) from the West. Hopefully, I am not too far from reality in retrospectively postulating the following list of rather optimistic expectations shared by a great majority of economists. Here I will rely on the results of four projects in the current history of economic thought: the Vienna program on "Comparative Reform Economics", initiated by Márton Tardos and myself between 1987 and 1989; the "Legacy - Imitation - Invention" project, which I ran in Hungary in 1995/96; the comparative project on "Economics and System Change" organized by Hans-Jürgen Wagener in Frankfurt/Oder between 1994 and 1997; and finally this project. 3 (Note3: See Kovacs & Tardos (eds.): Reform and Transformation. Eastern European Economics on the Threshold of Change, London, Routledge, 1992; Hans-Jürgen Wagener (ed.): Economic Thought in Communist and Post-Communist Europe, Routledge 1998; Kovacs: "Örökség, utánzás, felfedezés. Közgazdasági gondolkodás Magyarországon 1989 után" (Legacy, Imitation, Invention. Economic Thought in Hungary after 1989), in: Közgazdasági Szemle, April 1996; Research project: Three Social Science Disciplines in Central and Eastern Europe, Collegium Budapest/IZ Sozialwissenschaften, 2001/02.) The list of expectations consists of six items:
[10] To sum up, these expectations reflected a rather self-confident (and not at all submissive) attitude toward the performance of Eastern Europe in the international market of economic ideas and toward a rather cooperative and frictionless scholarly exchange with the West. The lack of friction meant that what we wanted to come in would arrive and that what actually came in would be what we originally intended to receive. Also, to use the language of political correctness, the economists in the region were portrayed not as handicapped or disabled but as differently abled persons who had authentic products to sell in that market. We tacitly assumed that it would be us who decided what to buy. The two economic cultures would complement each other and/or converge; that is, the incoming culture would not eradicate and replace the indigenous one. The best features of both would be combined while the worst ones would be offset. Mutual adjustment would be an organic process; the East would not have to go through a purgatory and would not arrive in a paradise. We were intellectually prepared for cross-fertilization; the knowledge we had accumulated so far was about to burst out like a subterranean river.
[11] From an "externalist" point of view, that is, from the perspective of change in the sociological and political framework of economic sciences, Western-led dissemination would be relatively successful. "Internally", however, that is, in terms of the scholarly contents of the research programs, the imported good of methodological precision via formal models would not suppress local traditions, but create promising blends with some of the Grand Ideas born in Eastern Europe. Because of a considerable improvement in the external conditions of scientific progress, we would witness a new era, (to put it in lofty terms) "the era of internalism", in which party congresses, censored journals, and politically-embedded scholars would not determine the paths of progress any longer. At the same time, the role of peer-reviewed publications and the faculty library (or the faculty club for that matter) would become much more nuanced in shaping scientific evolution.
[12] This era would therefore be a period of creating a better-than-normal situation in economic research in the region. It would be a sort of "business as unusual". The quality of economic thought in Belgrade or Bratislava would transcend not only the level of Lima or Cairo, but also hopefully that of Athens and Helsinki. The Eastern European economist would not become an indistinguishable agent of American economic science culture, a scholar of "secondary freshness", to quote Mikhail Bulgakov’s witty phrase.
[13] After having raised the "what did we expect?" question, one has no other choice but to ask whether these expectations have materialized during the last ten years. Do we already have the magnumopus in the economics of communism? Did East and West really meet in new institutional economics? Has scientific exchange become more equal, etc., etc.? It would be impossible and unfair, I believe, to start answering these questions before this project ends. However, in reading the project papers, I can’t help offering the authors a couple of half-baked concepts for recycling or rejection, concepts that might nuance the historical assessment of Westernization in economic sciences in the region. In closing, I will risk illegal border crossing and borrow from the Cultural Studies literature: without accepting its postmodern/postcolonial message. 4 (Note4: See J.M. Kovacs "Rival Temptations - Passive Resistance. Cultural Globalization in Hungary", in: Peter Berger and Samuel Huntington (eds.): Many Globalizations, Oxford University Press, 2002; Arjun Appadurai Modernity at Large. Cultural Dimensions of Globalization, Minneapolis, 1996; Mike Featherstone, Scott Lash, and Roland Robertson (eds.): Global Modernities, London, 1995; Ulf Hannerz Cultural Complexity, New York, 1992; Roland Robertson Globalization: Social Theory and Global Culture, Thousand Oaks, 1994; John Tomlison Globalization and Culture, Polity Press, Cambridge, 1999.) If you say that, under the pretext of borrowing a few concepts from there, I tend to smuggle some of my own assumptions into the analysis, I am afraid you are right.
[14] My notes will concern the actors of transnational exchange, the process of reception, and the results of Westernization.
[15] The cast. First, I advise examining whether the model of a two-person game suggested by the term "Westernization" (the West and the East, or even more roughly, the United States and the East) applies to the international exchange of economic ideas. On the side of the cultural emitter we find alternative "Wests" (Chicago and Cambridge, the World Bank and the ILO, etc.) nearer and farther "Wests" (Freiburg and Chicago), as well as traditional communication channels and contacts (Paris and Bucharest, Stockholm and the Baltic capitals). What if the West that influences us is actually Far East, say a Chinese scholar returning from Berkeley to Beijing, the capital of a communist country (what a shame)? On the receiver’s side, there are also a whole series of countries, institutions, groups of scholars, fields of research, etc. who/which may display significantly different patterns of borrowing. I am pretty sure that, despite a growing American impact on university education throughout the region, this project will find interesting differences in receiving economic science culture from the West, differences, for instance, between a paper written by a graduate student at CERGE in Prague on privatization and a talk given by a professor of economics at the Péter Pázmány Catholic University, Budapest on fair business practices. Actually, both persons in the game, the emitter and the receiver, can originate in one way or another in the region (think of the former Hungarian finance minister, Lajos Bokros, now a World Bank official, giving advice in Poland or Croatia). Owing to the global circulation of scholars and institutions, as well as to the proliferation of joint ventures in research and education, it is increasingly difficult to decide who the Eastern European economist and what exactly an Eastern European economic idea is. In the economic research group of our project, for example, there are three economists whose birthplace, affiliation, and the place and the language in which they publish greatly differ. Though it is a commonplace to say so, we had better rethink the concept of national economic science.
[16] The West supplies packages of competing (or even mutually exclusive) ideas and schools or provides the East with a broad menu of theories to choose from. Moreover, exchange is usually contingent upon mediators/translators who interpret, modify, repackage, or distort the original message. (Think, for example, of Jeffrey Sachs and his ambiguous role in popularizing economic liberalism in the former Eastern Bloc.) To make things even more complicated, the mediator can be a colleague from Eastern Europe (a long-time Harvard professor, a former émigré, or a temporary World Bank official). Or please note, for instance, the emergence of new, European research networks. Does anyone among us have an idea who the intellectual "owner" of the discoveries made by this project will be? Can we regard them as genuine Eastern European discoveries in the history of social sciences? Similarly, as the example of the revival of the Austrian school in the US demonstrates, ideas that once emerged in our vicinity may well return to us through American mediation. Nevertheless, the image of the "Huge American Ruminant" that swallows our inventions, ruminates them, and sends them back to us, is too crude for my taste.
[17] The plot. Second, I would advise closely scrutinizing the very act of scientific reception. The principle that "what is transferred is transformed" may apply even in the absence of mediators. The quality of a borrowed idea may deteriorate (or improve, for that matter) in the mind of the receiver. Or its meaning can change substantially. If you use Pepsi Cola to dilute low-quality rum, a favorite cocktail in Hungarian pubs, the message may turn into its opposite. It will be Pepsi without the Pepsi Feeling. Now, what should we think of those colleagues of ours, former professors of official political economy who have in the meantime converted to the new faith and today teach at a Department of Public Policy, use a standard American textbook (in translation), but do not understand its mathematical apparatus? In general, the borrower can pay lip service to the lender and just simulate the takeover of a certain scientific good, say, by imitating its rhetorical components, by appropriating only a minor part of a large cultural package, or by borrowing various parts in an eclectic manner. (I guess the reception of the rational choice paradigm in our region serves as an example here.) Finally, what we consider a veritable takeover may turn out to be a joint effort (in which the West is nothing more than a catalyst or a junior partner) or a simple coincidence. Insiders could tell dozens of stories about "silent contributions" made by Eastern European economists to research programs initiated in the West, contributions that have not even been registered as parallel or complementary discoveries (if you ask me, the studies of the informal economy are a prime example).
[18] Lessons. These are probably even more complicated than the cast and the plot. An outsider like myself finds by and large two narratives in current Cultural Studies literature. Unfortunately, both offer rather bleak prospects.
[19] In the opening sentence of my talk I promised complexity, irony, and praise. I hope I haven’t bored you too much with the complicated and often ironical details of Westernization. Have I forgotten about praising the profession? Actually, I haven’t. For I cannot imagine a greater compliment in such turbulent times as ours than the one I have been alluding to throughout my presentation: the profession has not collapsed. Moreover, as this project shows, it is interested in its own history. As far as I can see, the final country reports will not read like either obituaries or heroic stories. Just business as usual...
published 2002
