In his 1990 paper, Janos Kornai (1990) tantalizingly offers the prospect of a discussion of the relationship between ownership and coordinating mechanisms in reforming socialist economies. Unfortunately, the socialism he is talking about is the pre1988 variety, by now passe in all except a very limited number of countries (China? Vietnam?). His point is that certain combinations are more compatible than othersthey form a strong linkage in his words-hence, societies characterized by these strong linkages are more likely to thrive than those characterized by weak linkages. If this is true, then it is a crucial aspect of reform that the socialist economies in transition must take into account. Since 1989, one after another of the Eastern and Central European countries has embarked on the process of overturning communist regimes, starting a search for democratic alternatives and a new mechanism for organizing an economy in place of a rigid, bureaucratized central planning mechanism. The transition process itself seems to be intended to tum these economies into something more like their democratic, mixed-economy neighbors to the West. Now, if this transition only involves a move away from one strong linkage (state ownership plus a bureaucratic command economy) to another (private ownership plus a market economy), then objectively, one can only be judged better than another on the basis of outcomes (such as growth rates, output per citizen, equity in income distribution, and so on). However, the reformers (and their Western advisers) also have very strong value judgments and preferences: an a priori preference for private ownership per se. In Komai's tenns, this must also imply that a market coordinating mechanism is the necessary and sufficient second