The connection between growth imperative of monetary production economies, the realization problem and Kornai's surplus economy

Abstract

AbstractKornai challenged not only the dominant economic views of the socialist system, but also those of market economies. The former brought him fame, and the latter remained, so to speak, his scientific testament. He studied the systemic properties of different economic systems through the analytical grid of the sign of aggregate excess supply, which defined three categories: shortage economies, equilibrium economies and surplus economies. In this paper, we show that business plans postulated with the aim of realizing strictly positive net retained profits in nominal terms exclude equilibrium economies; these business plans imply a surplus economy. This definition of the business plan makes it possible to combine seemingly disparate results from different parts of the economic literature. An economy in which business plans are the rule and no economic agent can run a permanent negative budget is a surplus economy, which manifests itself in the phenomena of both growth imperative and realization problem. In short, all these phenomena are the manifestations of the same essence: the working of the business plans.