Domenico Nuti

• Bachelor of Laws. Rome 1962
• Sapienza University of Rome

Brexit is generally regarded as a possible step towards the disintegration of the European Union. Actually the EU crisis is much more serious: the Union has a series of fault lines, with its institutions and policies equivalent to tectonic plates sliding over each other and colliding. Currently there are at least a dozen fault lines crossing EU and...

Countries unable or unwilling to join a monetary union can replicate most membership effects unilaterally through either a currency board or the formal replacement of domestic currency by that of the Union. Potential benefits include lower transaction costs, lower interest rates, and lower exposure to speculative attacks. Costs include initial rese...

The search for a Third Way, intermediate between socialism and capitalism, began even before the birth of the Soviet Union, whose observed drawbacks encouraged a further search. There have been at least three alternative projects within this approach. 1. Market Socialism, combining public ownership, market allocation and socialist values of high em...

It has long been argued that pay formulas containing an element of profit-sharing have noninflationary employment promotion properties (Vanek 1965), except in self-managed enterprises (e.g., Vanek 1970). Recently Weitzman (1983, 1984, 1985a,b,c) has promoted economy-wide profit-sharing, combined with workers’ strict exclusion from employment decisi...

In 1962–1963 I had the privilege of attending Michal Kalecki’s lectures at the Warsaw Higher School of Planning and Statistics (SGPiS), as it then was, on the dynamics of a capitalist economy. From Warsaw I moved directly to King’s College, Cambridge, where I often heard Joan Robinson speak of Michal Kalecki as the man who had discovered the Genera...

The first, spectacular effect of the 1989 revolutions was the coming down of the Berlin Wall and the fast re-unification of Germany, first de facto in July 1990 with monetary unification, then de jure in October. German unification involved instant, automatic enlargement of the Community to include the ex-GDR (which already had a special de facto r...

The term “socialism” is relatively recent, appearing for the first time some 200 years ago in 1827 in the Co-operative Magazine in writings by some followers of Robert Owen. Undoubtedly the term was used by Owen in 1835 in the sense of an economic organisation constituted in the interest of workers. The concept of “communism” has more distant origi...

Some events are rare, extreme, unpredictable until they actually happen but perfectly explainable afterwards. Taleb (2007) calls them “black swans” after those ugly birds that, unimaginable until they were discovered in Australia, have precisely these characteristics. The collapse of Soviet-type systems in 1989–91, associated with a deep and almost...

Large-scale privatization of state assets is the distinctive feature of the recent transformation of Central East European economies, with respect to all earlier attempts at reforming the Soviet type system. Poland was among the first in announcing it (September 1989) and launching it (with the Act on the Privatization of State Enterprises, 13 July...

Ever since its inception in 1957 the European Union has been engaged in successive rounds of both widening—from six to fifteen members—and deepening, from sectoral co-operation to Customs Union, then to a Common Market and a deeper Single Market, then to a single currency, the euro. The current round of EU enlargement to the east, however, is very...

Under the heading of “corporate governance” we include problems arising when an enterprise is owned by more than one owner and managed by a hired managerial group, and also the rules and incentives appropriate to make it function as efficiently and impartially as if it were owned and run by a single owner-entrepreneur. Throughout this essay we shal...

The traditional cooperative enterprise—whether in Yugoslavia or France, Italy, or Britain—presents three main distinctive features:

One of the first, major, contributions to ‘Evolutionary Political Economy’ was undoubtedly made by Karl Marx with his theory of the evolution of economic systems—which he called, “modes of production”. According to Marx’s dialectical method, system evolution is driven by the emergence of conflicts and contradictions, and their resolution through ch...

The contract regulating labor employment by capitalist firms usually embodies three basic elements: a fixed money wage rate per unit of time, the subjection of workers to the employer’s authority in the workplace, and the short-term nature of the hiring commitment. Explicit or implicit departures from this standard can be observed; they are the res...

This paper reviews and attacks the standard classification of enterprise types by degree of employee participation in enterprise returns and control rights, an approach exemplified by the work of Ben-Ner and Jones (1995). This is conceptualized as a continuous spectrum of combinations of different degrees of the two forms of participation, with con...

The economics of institutions and comparative systems owes an enormous debt to János Kornai. This was well exemplified by Kornai (Shortage Economy—Surplus Economy, 2014a), offering a synthetic characterization of socialism and capitalism, respectively, as shortage and surplus economies. I was very fortunate, over the last fifty years, to have had m...

The Kaldor-Mirrlees model of economic growth (Kaldor and Mirrlees 1962) seems to contain an inconsistency between the assumption of imperfect competition and the relation it postulates between the wage rate and the marginal productivity of labour.

The contemporary economic system developed by China in the last two decades, supremely successful in achieving economic growth, defies traditional classification. It has been variously defined as socialist (by Chinese leaders), capitalist (Kornai), state socialist (Coase and Wang), political capitalism (Milanovic), a unique system with features of...

The privatization of state financial institutions is partly the same as for other state enterprises, namely the expectation—backed by recent literature on principal agent relations—of higher efficiency, through the subjection of state managers to bankruptcy rules and stock market discipline; the raising of budget revenue to contain or pay off gover...

Official price trends in the USSR and in the Soviet-type economies have changed markedly through time but have followed a roughly uniform general pattern: hyperinflation at times of war, systemic transition and reconstruction; inflation at times of accelerated industrialisation; stabilisation through currency reform and fiscal measures, followed by...

On Sunday 18 June 1815, at the Battle of Waterloo, Napoleon Bonaparte was decisively defeated by the Duke of Wellington and the forces of the “Seventh Coalition”, marking the end to his rule as French Emperor. Wellington is reported to have declared that the battle was “the nearest-run thing you ever saw in your life” (to Thomas Creevey, see Maxwel...

There are interesting links to be drawn between Tibor Liska’s model of entrepreneurial socialism and Polanyi’s explorations of alternative economic systems. Liska’s model is also an original version of what ‘market socialism’ might look like, if it is to differ from the model of a capitalist society pursuing socialist policies. This is important in...

The countries of Central and Eastern Europe, including the Soviet Union, are currently facing three major economic tasks at the same time: macroeconomic stabilization, both domestic and external; microeconomic and sectoral restructuring; and the transition from central planning to a mixed market economy. Political reform is also being attempted thr...

In 1990–1997, in the vast majority of central and eastern European countries, the “transition” to the market economy has been accompanied by mass privatisation schemes, i.e. the free or subsidised distribution of state assets to citizens, through vouchers or equivalent means (see Nuti, 1995). This was a major track for the privatisation of large st...

I am flattered at being classed as a rebel but I regard myself more as an omnivorous eclectic (of “catholic” tastes, I would say, if that label were not so potentially confusing when applied to a non-practicing atheist). I am not fond of labels; like all aggregates they destroy information and are potentially misleading. If pressed, I would choose...

The ultimate model for the wave of economic reforms attempted in Central Eastern Europe over the last thirty-five years has been a moving target. At first, reform aimed at improving Soviet-type central planning, replacing central commands with contractual relations, using net value instead of gross physical indicators of enterprise performance, cre...

For a number of years before 1989 Central Eastern European countries had been facing, to various extents, severe domestic and external imbalances, economic slowdown or decline and the need to restructure production capacity, while attempting to reform their traditional central planning system (see Nuti 1988). These problems were less intensely felt...

Over the last 30 years centrally planned economies, also known as Soviet-type or socialist economies or as instances of realized socialism, have often undertaken and to some extent implemented reform projects for the progressive expansion of the scope of markets at the expense of direct central allocation. From Yugoslavia to China, from Hungary to...

The post-socialist transition that began in 1990–1992 in central-eastern Europe and the former Soviet Union (FSU) was widely expected to lead to early significant improvements in the level and growth of people’s consumption and income.

In the Marxist-Leninist project of socialist economy the elimination of cycles in economic activity is the expected result of central planning replacing the ‘anarchy’ of capitalist markets. Ex-ante coordination of the activities of government, households and firms according to a consistent, feasible and efficient plan should, in principle, ensure t...

The restoration of capitalism, opened by the 1989 revolutions in Central and Eastern Europe and by the August 1991 coup/countercoup/revolution in the former Soviet Union, was expected to put those countries back onto the road to greater efficiency, technical progress, and prosperity. A “shock therapy” of price liberalisation, monetary and fiscal au...

Since the mid-1950s there have been repeated attempts at reforming the Centrally Planned Economy (CPE) of the Soviet Union and other Soviet-type economics, i.e. decentralising economic decisions, activating markets to replace plans, using incentives geared to performance at market values. The frequency of these attempts and their reversals indicate...

A striking feature of post-1989 systemic transition in Central and Eastern Europe is the widespread, almost universal reliance—to greater or lesser extent—on mass privatization, understood as offering the free or very heavily subsidized transfer of a large proportion of state assets to the whole population.

Michal Kalecki’s contributions to the economics of socialism—less widely known but no less important than his pioneering contributions to the economics of capitalism – span the period 1946–1970 and are affected by the development and performance of the Polish system, as well as coloured by his views on capitalist dynamics. They consist of a coheren...

My understanding of an inaugural lecture is a cross between sermon and sales talk, an occasion for inflicting one’s research and world view on to a well-disposed, yet watchful audience.

A moneyless socialist economy, outside the remote prospect of full communism, has been rarely suggested or practised; instances of its suggestion such as Neurath’s Naturalminschafi (1919), or its practice, such as Soviet War Communism (1918–21) at its peak or Cambodia in the early 1970s, were exceptions. Lenin had understood the importance of banks...

The contemporary economic system developed by China in the last two decades, supremely successful in achieving economic growth, defies traditional classification. It has been variously defined as socialist (by Chinese leaders), capitalist (Kornai), state socialist (Coase and Wang), political capitalism (Milanovic), a unique system with features of...

The economics of institutions and comparative systems owes an enormous debt to János Kornai. This was well exemplifi ed by Kornai (2014a), offering a synthetic characterization of socialism and capitalism, respectively, as shortage and surplus economies. I was very fortunate, over the last fi fty years, to have had many opportunities to meet him an...

In 1962, having just graduated in economics from the University of Rome ‘La Sapienza’ and hoping for a scholarship for Cambridge the following year, I decided to go to Warsaw, braving the coldest winter of the century, and learn more in corpore vili about the comparative economic systems which were to become my life’s main research and teaching int...

Central and Eastern European economies have made extraordinary progress in their trade and exchange regimes. Surprisingly, instant convertibility was established for a great variety of exchange rate regimes. In spite of diversity, all these countries have followed a common pattern: severe initial undervaluation - the cost of speed and unrestricted...

This paper reviews and attacks the standard classification of enterprise types by degree of employee participation in enterprise returns and control rights, an approach exemplified by the work of Ben-Ner and Jones (1995). This is conceptualized as a continuous spectrum of combinations of different degrees of the two forms of participation, with con...

L'effondrement récent des régimes à direction communiste en Europe centrale et orientale peut être paradoxalement interprété précisément comme le résultat du type de conflits et de contradictions que Marx associait à la transition du capitalisme au socialisme: échec de l'ajustement de la politique d'accumulation à l'épuisement des ressources en mai...

[eng] Transition or mutations ? For a new political economy of post-communist transformation The recent collapse of communist-led regimes in central eastern Europe can be seen, paradoxically, as the outcome of precisely the kind of conflicts and con­tradictions that Marx had associated with the transition of capitalism to socialism, such as : failu...

Without Abstract

The first, spectacular effect of the 1989 revolutions was the coming down of the Berlin Wall and the fast re-unification of Germany, first de facto in July 1990 with monetary unification, then de jure in October. German unification involved instant, automatic enlargement of the Community to include the ex-GDR (which already had a special de facto r...

I.El blanco móvil de la reforma económica. El modelo final de la oleada de reformas económicas intentadas en la Europa Central Oriental durante los pasados treinta y cinco años ha sido un blanco móvil. Al principio la reforma trataba de mejorar la planeación central de tipo soviético remplazando las órdenes centrales por relaciones contractuales; u...

The contract regulating labour employment by capitalist firms usually embodies three basic elements: a fixed money wage rate per unit of time, the subjection of workers to the employer’s authority in the workplace and the short-term nature of the hiring commitment. Explicit or implicit departures from this standard can be observed; they are the res...

There are interesting links to be drawn between Tibor Liska’s model of entrepreneurial socialism and Polanyi’s explorations of alternative economic systems. Liska’s model is also an original version of what ‘market socialism’ might look like, if it is to differ from the model of a capitalist society pursuing socialist policies. This is important in...

Public ownership of the means of production (in its forms of state, co-operative and local ownership) and macro-economic planning are the fundamental features of socialist economies of Marxist-Leninist inspiration. The known variants of this type of economy differ mainly in the extent and mix of public ownership, the degree of central control and i...

In the Marxist-Leninist project of socialist economy the elimination of cycles in economic activity is the expected result of central planning replacing the ‘anarchy’ of capitalist markets. Ex-ante coordination of the activities of government, households and firms according to a consistent, feasible and efficient plan should, in principle, ensure t...

A new Soviet law on cooperatives was drafted in March 1988, and approved in May of that year. This paper discusses changing Soviet attitudes to cooperatives, whose 'immense potential' is now acknowledged, and analyses changes in both draft and law. Considerable progress has been made in opening up new sectors of activity, reducing bureaucratic obst...

The new Soviet Cooperatives : advances and limitations From the end of NEP until recently, Soviet cooperative enterprises have consisted primarily of large collective farms (kolkhozy) virtually undistinguishible from state farms and of consumption cooperatives especially in housing. The latest wave of radical reform in the USSR has led to the impo...

Official price trends in the USSR and in the Soviet-type economies have changed markedly through time but have followed a roughly uniform general pattern: hyperinflation at times of war, systemic transition and reconstruction; inflation at times of accelerated industrialization; stabilization through currency reform and fiscal measures, followed by...

Michal Kalecki’s contributions to the economics of socialism — less widely known but no less important than his pioneering contributions to the economics of capitalism — span the period 1946-70 and are affected by the development and performance of the Polish system, and coloured by his views on capitalist dynamics. These contributions comprise a c...

Perestroika Domenico Mario Nuti Reform is almost as old as the history of socialist economies. Indeed the typical pattern is one of reform followed by reversals and recentralization, with pressure for reform mounting again as the system's shortcomings re-emerge. Is the current wave any different from the others? Many signs indicate that Perestroi...

Vladimir Karpovich Dmitriev was the first Russian mathematical economist. His Economic Essays on Value, Competition and Utility (1898, 1902; English edition 1974) are a classic text in economic literature.

In the Marxist–Leninist project of socialist economy the elimination of cycles in economic activity is the expected result of central planning replacing the ‘anarchy’ of capitalist markets. Ex-ante coordination of the activities of government, households and firms according to a consistent, feasible and efficient plan should, in principle, ensure t...

The contract regulating labour employment by capitalist firms usually embodies three basic elements: a fixed money wage rate per unit of time, the subjection of workers to the employer’s authority in the workplace and the short-term nature of the hiring commitment. Explicit or implicit departures from this standard can be observed; they are the res...

The pay-off period of an investment project is the number of years over which the project pays for itself from the time of completion, i.e. the sum of undiscounted after-tax gross profits over the period are equal to total investment outlays. There is evidence that enterprises investing in plant and equipment, mostly in industry, require for a proj...

We have found that the possibility of a wage-interest frontier with upward sloping segments does not depend necessarily on the presence of shut-down costs as Dr. Orosel has maintained, but more generally on the lack of opportunities for the truncation of production processes, combined with the appearance of a sufficiently high negative present valu...

The post-classical synthesis between the "constituted" versions of the neo-Ricardian and post-Keynesian theories appears next to impossible, since both constituted theories offer too little flexibility to allow for such a synthesis. On the other hand the "dissenting" versions of these theories offer several similarities and complementarities, in pa...

The purpose of this paper is that of considering the choice of production techniques from the point of view of both the capitalist entrepreneur maximising the present value of his firm's assets at a given interest rate and the socialist planner maximising the consumption per head associated with the maintenance of a given growth rate. A model of pr...

Incluye índice Traducción de: Socialist economics Incluye bibliografía Partes de la obra: La economía socialista. Acumulación y crecimiento económico. Técnicas de planeación. Reformas económicas. Técnicas matemáticas y planificación socialista. El modelo chino.