Eugen Varga and the Calamity of Stalinist Economics

Abstract

This paper presents a state of the art on the methodological issues surrounding Eugen Varga's contributions to Marxist economics in a chronological manner. André Mommen's recent Stalin's Economist. The Economic Contributions (2011) focuses on Varga's place within the general Marxist school of economic thought, thus widening the debate on the impact of Stalinist politics on the changing perspectives of Marxist economics. It is of the utmost importance to maintain a balance between the internal evolution of Stalinist economics as a social praxis and the determining force of exterior political motives. In the past, Varga has been marked as an ideologue with highly vacillating opinions because of his pragmatist attitude towards the ruling Stalinist bureaucracy. The recent literature reveals to the reader a more complex picture. Varga will not be remembered as the most original or skilled economist of his age, but he did fill up the theoretical space that ensued from the purges under Stalin. Varga started as a young pupil of the theorists of the Second International and had a minor impact on issues such as agrarian development and the role of gold in the modern capitalist economy. His political and theoretical itinerary continued in the Hungarian Council Republic followed by his ultimate flight to the Soviet Union. He became acquainted with the most important Soviet contributors to the political economy and international affairs: Lenin, Trotsky, Bukharin and Preobrazhensky. He developed an eclectic crisis theory that contains strands of thought of Lenin, Bukharin, Luxemburg and Hilferding. During the rise of Stalin, he tried to distance himself from any direct political involvement. This had a major repercussions on the theoretical level as he pursued a clear underconsumptionist but centrist agenda. In the 1930s, Varga became the most well-known spokesperson about Soviet economic affairs, when Stalin adopted his theory of the general crisis as an official doctrine. After the war, Varga fell out of grace with Stalin and was marked as a revisionist. Under the destalinization Varga retook his position as one of the most important political economists in the Soviet bloc, but he never regained his direct theoretical influence. Nevertheless, he was one of the fathers of the post-Stalinist state monopoly capitalism theory, which opposed the notion of organized capitalism.